The career of Faisal bin Juma Belhoul to date is virtually a metaphor for the evolution of the traditional Emirati family business.
The successful but sprawling Belhoul family conglomerate dated back to before UAE independence, but in a few years it was virtually reinvented as a modern investment company.
Then the main architect of this transformation, an energetic young businessman who had been fast-tracked to prominence within Dubai’s business elite, went global with a new investment venture, Ithmar, and a successful listing on the London Stock Exchange.
“What triggered the spark was the need to create an independent management team at Belhoul more than 10 years ago. I worked with my father to institutionalise and modernise the family business, and realised in the process the opportunities there were in independent investment management,” Mr Belhoul explains.
Now he is bringing something back to UAE markets in the form of the Dh2.5 billion market listing of the healthcare and education group Amanat on the Dubai Financial Market.
Potential retail subscribers to the Amanat plan are currently considering whether to follow the example of 37 of the Arabian Gulf region’s shrewdest investors – from wealthy individuals to top line professional investment groups – and go for the shares.
“We’re already assured it [the IPO] is an attractive and long-awaited initiative, and we’re sure it will be among the most successful launches in local markets,” says Mr Belhoul.
The recent volatility on global stock markets should not deter local investors, he says. “You always need to take into account the global and the macro, and there has been a bit of turbulence recently in the world. But not really in local markets. The IPOs of Emaar Malls and Marka were heavily oversubscribed. On a regional level, the timing couldn’t be better.”
Investors have until November 4 to make up their minds on the offer.
Malls and Marka have set the tone, with big levels of oversubscription. These two offered investors an opportunity to get a slice of the glamour side of UAE business: the most popular shopping venue in the world and the designer brands and lifestyle that goes with it.
Amanat offers something more basic, but, some would argue, much more important: the opportunity to take part in the further development of the two basic essentials of modern life in the UAE and wider GCC region: healthcare and education.
Mr Belhoul explains: “There had been a lag in the development of these two sectors. Governments had played an active role in the beginning of both of them, essentially providing them for free to the national population. But the surge in demographics has persuaded policymakers they should not do that job on their own. Now the government is withdrawing slowly and that’s good.
“Equally, there was a gap in the investment universe for these sectors. Conventional private equity has a limited lifetime, and these sectors need long-term commitment; bank loans were in short supply. Amanat will help fill that gap in this part of the world,” he says.
Education is one of the big growth sectors of the UAE, with big investors belatedly realising the opportunities presented by the country’s surging demography. Just last week, three big groups took a US$350 million stake in Gems, the biggest schools provider in the region.
Amanat’s plans are to buy and modernise existing schools, develop new school infrastructure and partner global groups looking to set up in the UAE and Saudi Arabia. The strategy is aimed across the educational spectrum, but will pay special attention to the needs of mainstream and low-income consumers.
“There is undersupply in educational facilities across the board, and this is what makes the Amanat case compelling,” says Mr Belhoul.
The strategy of the medical arm is similar: funding healthcare expansion in the form of hospitals, clinics and medical centres across the board, but with an emphasis on parts of the country relatively underdeveloped in health. “There is a lack of modern facilities north of Mall of the Emirates,” he says, giving the impression he means Ras Al Khaimah as much as Deira.
Relations with government in the chosen areas of operations – mainly the UAE and Saudi Arabia to start – are all important. “Government needs partners like Amanat to help develop their strategic plans. We’ve had dialogues with numerous official representatives in the GCC region,” he says.
Of course, he has already has unique experience as an investor in health care, via his other job as executive vice chairman of the Ithmar Capital private equity firm he started in 2006, after the restructuring work at Belhoul was complete.
Ithmar was one of the main forces behind the successful £472 million (Dh2.8 billion) flotation of Al Noor Hospitals group last year in London, and is still sitting on a stake worth about £180m. But there are no current plans to warp the Al Noor stake into the Amanat asset portfolio.
“Amanat has a clear independent strategy and is not related to investments of Ithmar. There is nothing to stop us doing it, but that would be at some stage in the future, and would be on the basis of clear opportunity and an arm’s length transaction,” Mr Belhoul says.
Nonetheless, there is a note of regret in his voice as he explains: “Al Noor went to London because it wanted an international profile and there was a different regulatory standpoint in the UAE then. It only wanted to float a small amount of the capital.”
UAE regulations have since been relaxed, enabling the wave of IPOs that has reinvigorated local markets. “Maybe if things had been different, Al Noor would now be considering a local listing,” he says.
fkane@thenational.ae
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