Bahrain’s GFH spins off infrastructure assets to new unit

Company plans to list new subsidiary, Infracorp, on a GCC exchange over the next 24 months and issue green sukuk

GFH's new subsidiary will manage an asset portfolio worth about $3 billion. Philip Cheung / The National

GFH Financial Group, an investment bank based in Bahrain, is spinning off its infrastructure and property assets and forming a new company that will focus on sustainable investing across the Gulf region and other global markets.

The new subsidiary, Infracorp, will manage an asset portfolio worth about $3 billion, which includes land in the Gulf, North Africa and South Asia, GFH said on Sunday.

“The launch of Infracorp has been in response to the significant need and opportunity for private sector investment in the development of sustainable infrastructure as global economies transition to becoming more equitable and socially and environmentally conscious,” said GFH chief executive Hisham Alrayes.

“Unprecedented levels of capital are needed to both upgrade and develop sustainable foundations and Infracorp is well placed to put its capital, insight and ethos into investments that support sustainable growth.”

GFH has a strong investment portfolio that spans the Middle East, the US, the UK and Asia in various sectors such as health care, education and logistics.

Last month, it teamed up with Kuwait-based asset management company Wafra International to acquire a portfolio of logistics assets in the US.

Spinning off its infrastructure assets will allow GFH “to focus more on financials assets while allowing Infracorp to manage and deliver returns from infrastructure and real estate assets, which have a longer investment cycle than banking activities”, said Mr Alrayes.

“We believe the move will reflect positively on GFH’s results and the quality of our balance sheet.”

The company plans to list Infracorp on a GCC exchange over the next 24 months and issue green sukuk to raise more funds and create “even greater value and provide a unique opportunity for investors”.

GFH more than doubled its net profit on an annual basis in the third quarter of 2021, underpinned by a strong performance in the group’s business lines.

Net profit attributable to shareholders of the bank in the three months to September 30 surged by 187.3 per cent to $23.3 million, from $8.1m in the third quarter of last year.

Meanwhile, net profit for the first nine months of the year surged more than 160 per cent a year to $60.3m, owing to substantial growth in income and profits.