Arqaam Capital focus shifts to deals on the continent

Arqaam Capital is preparing to start making deals in Africa as it seeks to become the first call for emerging and frontier market firms seeking to deal in equities, commodities and derivatives.

Arqaam Capital is preparing to start making deals in Africa as it looks to become the first call for emerging and frontier market firms seeking to deal in equities, commodities and derivatives.

The Dubai-based investment bank, which has grown its staff from four to 110 personnel within the past four years, is shifting its focus to the continent as it prepares for up to 15 mergers and acquisitions deals across its growing global business.

"Within the next six to 12 months my expectation is that we'll be announcing deals in sub-Saharan Africa," said Riad Meliti, Arqaam's chief executive. "The firm currently is running 15 mandates in M&A [mergers and acquisitions]," he said. "Normally we lead in with corporate finance and then we follow up with sales, trading and research," he said.

Arqaam's strategy focuses upon intermediating fund flows between emerging and frontier markets, which Mr Meliti says are underserved by existing financial firms. "The biggest opportunity in financial intermediation that we see in the world is in the frontier and emerging markets," he said. "There aren't enough firms or resources focused on the size of the allocation shift that's taking place."

Allocations of funds into emerging markets grew by six times between 2002 and 2012, according to Arqaam's research. During the same period, frontier market allocations rose by 20 times.

Africa is having a good year for deals. The continent has accounted for 208 M&A deals worth US$13.5 billion during the year so far, according to data from Thomson Reuters.

Arqaam has offices in Dubai, London, Lebanon and Egypt, having last year acquired El Rashad Securities Brokerage, an Egyptian firm, and Al Rashad Finance and Management Advisory in Libya. The firm is also preparing an office in Saudi Arabia and looking at South Africa as its next step.

Arqaam Capital last month announced that it had acted as the exclusive financial adviser to Cairo-based Magrabi Retail in the purchase of a controlling stake in the Turkish optical retailer, Sisli Optik Ticaret.