Dubai-based EIIB-Rasmala in bid to buy remaining 49% of Egyptian associate

The lender has been in an expansion mode after years of restructuring and consolidation following the global financial crisis.

EIIB-Rasmala, a Dubai-based investment bank and asset manager, is moving to buy the remaining 49 per cent of an associate company based in Egypt.

The takeover of Rasmala Egypt Asset Management (Ream) follows new strategic initiatives for next year, said the local lender, which has been in an expansion mode after years of restructuring and consolidation following the global financial crisis.

“We are now opening discussions with potential joint venture partners to expand our investment activities in both Egypt and other parts of Africa,” said Zak Hydari, the chief executive of EIIB-Rasmala.

Ream’s equity asset managers last year rewarded clients with a 31.3 per cent return on their investment, outperforming the Egyptian benchmark at 24.1 per cent and other Egyptian funds at 21 per cent.

The company’s fixed income portfolios offered a 10 per cent yield annually over the past five years, compared with 9.9 per cent average return for one year US Treasury notes in the same period.

Rasmala was forced to withdraw its private equity fund and shut down its brokerage arm after the global financial crisis cut access to credit and sent Dubai shares tumbling by more than 50 per cent.

The investment bank had an agreement with Royal Bank of Scotland to produce research on Middle East equities and provide other financial services, but that ended in March 2012 as the UK-based lender looked to exit its cash equities business globally.

Rasmala won a reprieve a short time later when EIIB, also known as European Islamic Investment Bank agreed to inject US$16 million for a 35 per cent stake in the Dubai-based bank. EIIB increased its stake to 76.3 per cent at the end of last year. The combined group is listed on London’s Alternative Investment Market.

In November, EIIB-Rasmala told The National it was finalising the launch of two leasing fund strategies and planning to expand its UAE property business.

The Dubai investment bank also said it expected to raise about US$1 billion for its growing leasing and alternatives business and approximately $250m to invest in a broad mix of property transactions in the United Kingdom.

The Dubai Financial Market General Index is up 34 per cent this year after UAE shares were incorporated into MSCI’s Emerging Markets Index and Dubai won its bid to host Expo 2020.

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Published: November 17, 2014 04:00 AM


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