Now this was one I’d been looking forward to greatly. Lunch at Zuma, probably the outstanding DIFC eatery of the past decade, with Ziad Makhzoumi, one of the most compelling men on the Gulf financial scene with a reputation for convivial conversation, insights into business in the region, and (according to the legend) “knowing where the bodies are buried”.
All the boxes for a fascinating meeting were already ticked but add to that list the fact he was at the heart of one of the biggest deals in the UAE’s booming healthcare market – the nine-figure sale of fertility group Fakih IVF to NMC in 2015 – and a perfect working lunch lay ahead.
I’d happily agreed to Zuma because I knew he liked it. We’d had several lunches and dinners there over the years and usually rounded it off with a cigar, another thing for which he was well known. But it was not to be this time.
“They’ve stopped cigar smoking anywhere in the restaurant, even at the bar,” he said soon after we sat down. “People complained. I can understand that at the table, but in the bar?” He seemed genuinely aggrieved that people should be so intolerant but was already making contingency plans. “There are lots of other places you can smoke a cigar in peace,” he said, reeling off a list of fine smoking venues in Dubai.
Not that the Zuma cigar ban had coloured his overall view of the restaurant. “I’ve been coming here since it opened in 2008 and it’s still one of my favourite places. Good food and good service, and interesting people. It’s a bit like the Savoy Grill in London – everybody wants to be there, and be seen there. There are always interesting people to look at,” he said.
On a Sunday lunchtime, Zuma was not particularly crowded. For lunch or dinner on Thursday, for example, there is a long waiting list and the restaurant is packed, usually with a crowd of hopefuls hanging around the bar in the remote chance a table might come free.
We had had no such trouble booking, although I suspect that even if it had been busy, Mr Makhzoumi’s name would probably have got us a table anyway. He has a reputation.
A lot of that stems from the five-year stint he did as finance director of Arabtec, the Dubai contractor that never seems to be out of the headlines, often for the wrong reasons. The company – founded by his Lebanese compatriot Riad Kamal in 1975 – was one of the foremost contractors of the Dubai building boom, working on many of the iconic developments, including the Burj Khalifa, in the emirate and elsewhere.
Then things went sour during the real estate crisis that began in 2008 and accelerated through the global financial crisis. Changes of strategy and ownership brought some hope of a transformation that never materialised. In the week before we sat down at Zuma, Arabtec had declared a Dh3.4bn loss and a Dh1.5 billion rights issue to plug the financial hole.
“Contracting is cyclical. I went through it when I was there and now it’s happening again, with projects and cash flow slowing,” he said. I made a note to come back to the subject of Arabtec later in our lunch.
First, we had to order, which is always a pleasure at Zuma. The cuisine is modern Japanese, but if you think that is raw fish, think again. The great delight of the Zuma menu is that there is such a wide variety of east Asian cuisine it is virtually impossible to be disappointed. Well-judged portion sizes mean if you do not like one dish, it can easily be set aside as you greet the next delicacy.
We chose from the “ebisu” menu – the express business lunch named after the Japanese god of fishermen and good luck. Avocado tempura, seared salmon and tuna and prawn and black cod gyoza for starters, followed by Chilean sea bass and prawn katsu don buri. A manageable feast.
I was interested in what had led Mr Makhzoumi into the Arabtec hot seat and he gave me a quick biography.
After school in Beirut, he was accepted for a place at Stanford University in California but the fees at one of the top educational facilities in the US were too much even for his comfortably off family and he opted instead for Manchester, where he already had friends. “I’ve no regrets about that. I loved England then, and still do now. It was a great adventure, even though I didn’t have much money and communication with Lebanon was difficult,” he said. This was just as the country’s long civil war was getting deadly serious.
He studied engineering and electronics “because technology was the future then, as it is now”, but did not want to be an engineer, so did a master’s degree in business administration instead. That prepared him for a job as a consultant with Booz Allen & Hamilton, based in London but working all round the world, which in turn paved the way for a term with the family investment office, run out of Luxembourg.
Then he branched out as a consultant on his own, mixed in with a bit of teaching at London Business School, which topped off an all-round career in entrepreneurship, advisory, restructuring and finance in the corporate world.
“It was very successful, both professionally and financially, and I was looking forward to semi-retirement. I was in the UAE, fishing for hammour from a boat off Jumeirah, when I got a call from Riad Kamal,” he said.
Mr Kamal had founded Arabtec in 1975, but by 2008 was looking for somebody with Mr Makhzoumi’s skill set to restructure the company and clean up its balance sheet. “Riad is a very wise man and realised Arabtec had to do something. It had expanded very fast and was beginning to experience cash-flow and project problems. It was a good company, the oil price was high and it had a lot on its plate with residential and infrastructure projects. But none of us thought it would get so bad so quickly.”
He was chief financial officer when the global financial crisis hit Dubai hard a year later. Projects got cancelled, invoices went unpaid and Arabtec found itself in the doldrums. Salvation came in the form of a takeover by Abaar Investments of Abu Dhabi, whose deep pockets and new management were meant to push through a change of strategic direction for Arabtec.
By 2013, Mr Makhzoumi found himself out in the cold and Mr Kamal followed soon after. Mr Makhzoumi does not like to talk about this fraught career episode and indeed there are contractual reasons why he cannot say much. “It was an interesting challenge and for a while we got it right. We had a good position in a lot of markets but the strategy changed. My services were not needed,” he said. I got the impression a fuller version would not come to light until he wrote his memoirs.
So, approaching his sixties, he was again contemplating semi-retirement, when another call came out of the blue, from a friend of a friend, a Lebanese doctor called Michael Fakih. He had built an enviable reputation, and a thriving business, as a fertility specialist, with a commitment to new technological techniques that had brought him an influential list of satisfied parents in the UAE and elsewhere in the Gulf. Mr Fakih needed an experienced chief executive with an entrepreneurial background to help him get the business to the next stage.
“The problem with good doctors is they are not necessarily good businessmen. IVF was a sector of a very competitive business, health care, but it was not as well known as other specialisms. I helped him build it. He wanted to exit the business, either through an initial public offering [IPO] or a sale, and we got him there way ahead of time and for a very generous valuation,” said Mr Makhzoumi, who became chief executive of the company.
In 2015, the UAE health giant NMC was persuaded to pay nearly Dh700 million for a 51 per cent stake in Mr Fakih’s company. Mr Makhzoumi’s term as chief executive was over, with a healthy emolument for having helped his friend pull off such a good deal.
The waiter had cleared away our plates and chopsticks and coffees were being served. Now would have been the time to light up that cigar but we necessarily did without as Mr Makhzoumi brought the story up to date.
He is now the chief executive of Prime Strategy Consulting Group and has maintained his interest in the medical sector, advising a couple of companies in the sector. One, Imperial Eye Care in Dubai Healthcare City, is looking to follow the Fakih route with a listing or a sale; another, in the field of medical and diagnostic analysis, is working on a testing technique by which a single drop of blood can give a patient a compete analysis of possible diseases and conditions, with big potential applications in Asia and Africa where testing is expensive and logistically difficult.
“We can do things at a fraction of the current cost. It’s intellectually stimulating and it’s good to help invent things that can help people. I like to think of myself as a game changer. I admire what Bill Gates has done in helping prevent disease. I’ve been trying to get to him to suggest some collaboration,” he said.
The conversation drifted into politics. Mr Makhzoumi was a big admirer of late British prime minister Margaret Thatcher, a leading force on the right in Europe in the 1980s, but he has little time for modern populist thinking, especially by US president Donald Trump.
“The USA is built on multi-cultural foundations and you cannot tarnish people just because you don’t like them or their religion. He is spreading so much misleading information and he will end up creating more terrorists if he goes round shouting ‘bloody foreigners go home’. And there is the questionable business relationship with the Russians.”
He began to chat about things that anger him, like the wars in Syria and other parts of the world, injustice, poverty and neglect of young people and their potential, avoidable disease.
“What also annoys me is that the younger generation don’t communicate any more. It’s all selfies and symbols, no words. It really worries me when I see children of two or three sitting in a restaurant with an iPad. We are losing touch on reality and need to bring back proper human interaction,” he said.
We had been talking for nearly two hours by now, and there was still plenty to discuss, but we decided to call it a wrap. Just how much longer we would have gone on for if we had a couple of nice fat cigars to linger over, I will never know.
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