Dubai-based alternative asset management firm Al Masah Capital Ltd is looking at South East Asia’s largest economy – Indonesia – as it seeks further private equity opportunities in the region.
The firm already has presence in Singapore and Malaysia, where it has made investments in the healthcare and education sectors.
“We are expanding fast in Southeast Asia while keeping the growth momentum in the Middle East. Last year we bought about 17 kindergartens in Singapore and we have also bought about 25 GP clinics in Kuala Lumpur and are looking at acquisition of more than 10 dental clinics in Singapore,” CEO Shailesh Dash said in a report in Gulf News.
The firm currently manages 42 assets across the Middle East and Asia. More than 90 per cent of its funds are deployed in the Gulf region; of which nearly 70 per cent of the funds are invested in the United Arab Emirates (UAE).
“We have investments across all our platforms such as healthcare, education, food and beverages and logistics in the UAE. Our healthcare business is going through a branding exercise that is likely to be completed within a few weeks from now,” Dash said in an interview with Gulf News.
The firm is also looking at making new acquisitions in the logistics, food and beverages sectors, although the officials did not specify any country in particular.
Under its logistics portfolio, Al Masah’s investment vehicle Gulf Pinnacle Logistics recently acquired 75 per cent equity stake in Abdul Muhsen Shipping and 87.5 per cent in So-Safe Logistics, with a combined land area of 45,000 square metres, built-up warehouse area of 20,000 square metres and full-fledged logistics consolidation operation.
In the food and beverages segment, the company has signed an agreement to buy an American burger chain with 14 outlets already operating in the UAE with a perpetual franchise for the UAE and Oman.
“These acquisitions are driven by the transportation and logistics hub potential of Dubai. Later on we have plans to start a B2C (business to consumers) e-commerce platform,” Dash said.
For 2015, the firm’s chief executive commented that he expected a strong pickup in private equity and asset management activity, as the increase in fund flows from limited partners will drive more acquisitions.
Last year, Al Masah raised close to $600 million in funds from investors including, wealth managers, private banks, sovereign wealth funds and family offices.
Al Masah manages more than Dh1 billion ($272.26 million) under its private equity portfolio.
Al Masah’s healthcare platform, Healthcare MENA Limited was recently named the Private Equity Fund of the Year at the 6th Annual MENA Fund Manager Performance Awards in Dubai. Dash noted that the company was “doing extremely well with average annual profit growth of more than 65 per cent”.
Under the education sector, Al Masah has 26 assets in primary education across the UAE, Singapore and Oman.
Commenting on the decline in oil prices, Dash believed that the situation should have a positive impact on the private equity industry.
While low energy costs are going to help the recovery of emerging markets, boosting their energy demand, he pointed out that lower oil prices would restrict high cost oil producers, bringing down the supply. Thus, the market is expected to find new price equilibrium.
“The impact of oil prices on asset prices in the region is yet to show up. This happens only if there is a crisis like situation. I don’t foresee a crisis from this as the cycle is expected to reverse in the next 10 to 12 quarters as global oil demand picks up. One should also not forget decline in asset prices offers attractive buying opportunities,” he said.
Following the financial crisis, when the asset prices tanked, private equity investments took a beating, Al Masah focused on fixed income assets that eventually delivered 8.5 per cent to 9 per cent return on investment. The division offers diverse regional and special opportunity funds as well as discretionary portfolio management schemes.