Jassim Al-Seddiqi: The new face of Arabian Gulf finance
Jassim Al-Seddiqi: The new face of Arabian Gulf finance
After training in engineering, he branched out into finance only in 2008. Now, not only does he handle investments for some of the biggest names in the Abu Dhabi establishment, but his firm has also become a core component of the UAE’s newest financial center, the Abu Dhabi Global Market.
Now Al-Seddiqi, 33, is increasingly switching his attention outside the UAE, and the new economic environment in Saudi Arabia is certain to play a big part in that global focus. “The Saudi privatization program and Saudi Aramco share sale will have a massive spillover effect for all of us,” the ADFG chief executive said.
ADFG already has a key foothold in Saudi Arabia via its 48 percent stake in Shuaa Capital, the venerable Dubai financial institution that hit hard times during the global financial crisis and has struggled to regain its former pre-eminence.
“Shuaa was just a skeleton really when we bought it. We made major changes to it, and for our part that has been positive, as you can see in the results in the first half of this year. You will see more progress in the second half. It is at its most profitable for years. It has a legacy in the UAE, but it is very much back in action now, across the region,” he said.
Al-Seddiqi bought the shares from the government of Dubai last year in a $100 million transaction that was seen as a fresh start for the Dubai institution. Along with Shuaa’s businesses in capital markets, investment banking, asset management and credit provision, the deal brought with it two very important licenses in Saudi Arabia — with the Capital Markets Authority and the Saudi Arabian Monetary Authority — that gives ADFG operational freedom in the Kingdom.
“One of the big attractions of Shuaa was that it already had a presence in Saudi Arabia,” Al-Seddiqi said.
He is determined to put that to good use. “We’re looking to expand in Saudi in real estate investment trusts, initial public offerings (IPOs), cross-border advisory work and in underwriting. We’re interested in all the privatization plans. We’re in discussions with Saudi partners to invest alongside them. We’d very much like to do that,” he said.
Real estate is a big element in the ADFG portfolio, and is also featuring prominently in its Saudi thrust. There are ADFG hotel developments in Jeddah, Dhahran and Riyadh, and a 700-unit residential project in Riyadh. At some stage, they could all be rolled into a real estate investment trust and listed on a regional exchange.
ADFG has gone global in the real estate business, with high-end residential and commercial property, warehouses, shopping malls and hospitality assets across the UK, Middle East and Eastern Europe.
Last year, ADFG bought control of Northacre, one of the biggest developers of prime property projects. In Dubai last week, Al-Seddiqi and Niccolo di San Pietro, Northacres’s chief executive, unveiled their latest project in the upmarket “golden postcode” — SW1 — in London’s swanky West End: The £1.5 billion ($2 billion) redevelopment of the area around the former site of New Scotland Yard in Westminster.
Labelled “Broadway,” the project is now under way, with the austere 1960s Metropolitan Police headquarters having been demolished, and work begun on six towers of residential, commercial and leisure properties that will, ADFG hopes, become a new quarter in an area that borders on some of the UK capital’s most historic and valuable sites.
ADFG secured a £700 million loan from First Abu Dhabi Bank to get the project under way. It owns 40 percent of the project outright, with the balance funded by wealthy regional investors and one regional sovereign wealth fund.
It might seem something of a risk given the volatile state of the UK property market in the wake of the Brexit vote, but Al-Seddiqi and San Pietro have done their preparatory work thoroughly. “The project’s fully funded, and we are not too concerned over where Brexit will lead. We see London strictly from that long-term perspective,” Al-Seddiqi said.
ADFG now has some £3 billion of property assets in central London, but still sees the value of the city as an international investment destination. In fact, it believes the fall in prime asset values in the city — around 10 percent since the Brexit vote in summer 2016 — along with the roughly 20 percent decline in the British currency, represent a “good entry point” into real estate there.
As San Pietro said in Dubai: “Because the market is sluggish, probably now is the right time to buy into London. It’s been so every time there’s been uncertainty surrounding London’s property market in the last 20 years. This time needn’t be any different.”
Northacre, and ADFG, have a lot riding on central London real estate, with several other developments completed in the same area around the West End. But it still sees demand from the global investment community, especially in the Middle East and Asia, where they have been marketing the projects.
ADFG is also ambitious in real estate in Egypt, where it also has interests in education, as well as seeking to get more involved in the Egyptian financial scene via IPOs, advisory work and underwriting.
Its other notable international investment is in the Capital Plaza and CenterVille Hotel in Montenegro, the biggest mixed-use scheme in the Balkans.
Real estate is also a big part of ADFG’s UAE asset portfolio. Earlier this year, it launched the Etihad REIT, a Shariah-compliant investment instrument with 10 income-producing projects in its seed portfolio. That could be the subject of an IPO at some stage on a local market.
Given the strength of Al-Seddiqi’s connections in the UAE capital, such an IPO is likely to be on an Abu Dhabi market. Last year, ADFG provided a major boost to the Abu Dhabi Global Market (ADGM) when it launched its 735 million dirham ($200 million) “Goldilocks” fund in the financial center, with the prospect of listing it at some stage on an ADGM exchange of funds.
The “Goldilocks” concept is a new one for regional investors. Al-Seddiqi aims to replicate the strategy of “activist shareholders,” where a shareholder actively influences management toward optimizing the value of the shares, which is something quite common in Western markets. He calls it “constructivism,” or constructive activism, and he has used the tactic in relation to Shuaa and to GFH Financial, the Bahrain-based firm whose shares are listed in Bahrain, Kuwait and Dubai.
“Typical opportunities which Goldilocks invests in are companies whose intrinsic values are not recognized by the public market due to complex corporate or capital structures, asset mispricings, under-researched or ‘below the radar’ coverage, inefficient management and the lack of industry or market expertise in extracting value. We seek to add value through board representation and management engagement while investing for the short- to medium-term,” Al-Seddiqi said.
That strategy is paying off. “Things are going very well in Abu Dhabi. The Goldilocks fund is now worth 1.7 billion dirhams,” he said.
Abu Dhabi could also be a model for how the Saudi Arabian financial center might develop over the coming years in the course of the Vision 2030 transformation away from an economy based on oil and public sector dependency. Some observers believe that the increasingly close ties between Abu Dhabi and Riyadh could lead to a bigger role for the UAE capital in the Kingdom’s $200 billion privatization program launched as part of the transformation program.
“ADGM is a very progressive financial center. Because it is new, it has the ability to look back at all the other centers and see what has worked and what has not. It has a lot to offer Saudi Arabia in its transformation. Abu Dhabi could be a halfway house for Saudi Arabia as it spreads its message to the world,” Al-Seddiqi said.
He said the recent news that Virgin Group founder Richard Branson is interested in getting involved as an investor in Saudi Arabia’s Red Sea Resort was a major advance for the Kingdom. “I see that Richard Branson is involved, which is significant for Saudi Arabia,” he added.
“There are challenges for Saudi Arabia, of course. In every transformation there is a challenge. But the region has fared extremely well in challenging conditions over the past few years, and I think the tough part is behind us and things will get better now.
“The regional economies have been streamlined and rationalized, but what happens now will be an important step for all of them. Lifting the driving ban was a very big thing, but there are also very important things going on in tourism and leisure.
“But these things take time, and the leadership in Saudi Arabia is juggling things efficiently. The Saudi economy is very important for the region. If you’re not involved there, you are not doing the job properly,” he said.
Al-Seddiqi’s rise has been fast, and his ambition is big. One foreign banker in Abu Dhabi said: “He’s the rising force in the UAE financial scene, and could make ADFG into a regional financial powerhouse. He’s the face of the next generation in the Gulf.”