Alpha Dhabi plans to list some companies this year as it goes ‘shopping’ for assets

Abu Dhabi conglomerate Alpha Dhabi Holding plans to list some of its portfolio companies this year amid strong market performance and will continue to explore new acquisition opportunities globally amid improving valuations, its chief executive said.

Set up in 2013, ADH, a unit of Abu Dhabi's International Holding Company, is listed on the Abu Dhabi Securities Exchange and currently has a portfolio of more than 250 businesses across health care, renewable energy, petrochemicals, real estate, construction and hospitality, among others.

“Our strategy is to buy the companies, grow them to a level, and after that, put them up for an IPO [initial public offering],” Hamad Al Ameri told The National.

“This is how we work. We have so far six companies already on the ADX and this shows our commitment to IPO the companies … Our strategy today focuses on growing those assets and putting the right governance, putting the right measures to be ready for a listing. Of course, a lot of them are going to come within the right time.”

Alpha Dhabi’s listed subsidiaries include property developer Aldar, contractor NMDC, National Corporation for Tourism & Hotels, health care companies Response Plus Holding and Pure Health, as well as real estate company Q Holding (now renamed Modon).

ADH is “going to have a few IPOs this year”, subject to market conditions and regulatory approval, Mr Al Ameri said, without providing further details.

GCC markets have recorded strong listing activity this year amid increasing investor interest and a public mandate aimed at supporting IPOs to boost liquidity in local bourses.

In the region, 10 companies tapped equity markets in the first quarter, raising a combined $1.2 billion in proceeds, according to PwC's quarterly IPO Watch report.

The UAE market, in particular, has seen a boom in listings across sectors in recent years, buoyed by strong economic growth along with investor demand.

The UAE’s gross domestic product expansion last year was stronger than previously estimated, at 3.6 per cent, the UAE Central Bank said last month. That is up from the 3.1 per cent that the regulator forecast in the fourth quarter.

Growth in the Arab world’s second-largest economy was driven by the non-oil sector, which expanded by 6.2 per cent during the period.

While the Central Bank expects growth of 3.9 per cent this year, that is projected to accelerate to 6.2 per cent in 2025, on rising oil production as Opec+ eases its supply cuts as well as the continued expansion of the non-oil sector.

Despite geopolitical tensions in the Middle East due to the Gaza war, the UAE has been playing a “very dynamic role for navigating those challenges”, Mr Al Ameri said.

“It's becoming the haven of the whole region around us, which is bringing more people believing in the economy, more people willing to put their money here, more people willing to invest in this region, because it's stable, and it's been really controlled and fruitful for the investors,” he said.

'Shopping time'

While ADH has been expanding its presence locally, it is also seeking opportunities globally to diversify its assets, especially in the current climate, as the global economy continues to battle inflation and boost stagnating growth.

The global economy is expected to grow by 2.6 per cent this year, a report by the World Bank last month found. While it is projected to rise to 2.7 per cent in 2025-2026, the rate remains below the 3.1 per cent average in the decade before the coronavirus pandemic.

“I can identify this time as shopping time. It's the right time for getting the right evaluations [for] the right assets that we know how to go with and how to change the performance of it,” Mr Al Ameri said.

The conglomerate, through its entities, has been investing in Europe, the US and Africa across sectors such as health care, construction, hospitality and energy, among others.

In October, ADMO Lifestyle Holding, Alpha Dhabi’s joint venture with Monterock International, bought a stake in Lebanese fine dining brand, Em Sherif. In January, ADMO also acquired luxury lifestyle group Ce La Vi, which has a strong presence in South-east Asia.

Also in January, ADH transferred its 25 per cent stake in US-based oil engineering company Gordon Technology to a joint venture with Adnoc Drilling, called Enersol, that was set up in November.

The JV, called Enersol, aims to invest up to $1.5 billion to acquire technology-enabled companies in the oilfield services sector.

Last month, Enersol also agreed to increase its stake in Gordon Technology in a $270 million deal. The move to acquire an additional 42.2 per cent stake, along with its existing 25 per cent, will make the Abu Dhabi company the majority shareholder in Gordon Technology.

Meanwhile, its subsidiary Pure Health completed its $1.2 billion acquisition in January of UK hospital operator Circle Health Group. That comes after Pure Health’s Dh1.8 billion ($490 million) equity investment in Ardent Health Services, the US’s fourth-largest private health care group.

“We see the economy [globally] has a positive potential to grow. Even if there is a risk somewhere, that means it's time to select the right assets,” Mr Al Ameri said.

“Whatever is going to happen all over the world, there is always an opportunity to make the right decision in the right economies.”

But he also stressed that the company extensively studies its target markets, especially in light of geopolitical tensions.

“[We do] not put our money in a risky place unless we have a protection every time for anything and on the right assets," he explained.

“We are not [just] investing in the economy, it’s to expand those assets outside that economy,” he added.

ADH anticipates strong growth in markets such as Egypt, India and the US and is evaluating opportunities there.

The company has so far invested Dh11 billion on assets and through mergers and acquisitions, with plans to continue investing, Mr Al Ameri said.

“We always play in the long term strategies more than the temporary ones.”

Climate and AI

One of ADH’s key focus areas is climate capital, and the conglomerate has invested in renewable energy through its W Solar Investment platform. In 2022, Alpha Dhabi and Abu Dhabi conglomerate ADQ also acquired a 15 per cent stake in the OCI Methanol Group for $375 million as part of a push into the hydrogen economy.

“We believe that this sector can grow heavily in the next few years,” Mr Al Ameri said.

While the returns are also attractive for green investments, “I believe it's mandatory to invest in this – something beyond only financial impact”, he added.

During Cop28 last year, the UAE announced a $30 billion new private investment vehicle for climate action, Alterra, with a focus on improving access to funding for emerging markets and developing economies.

Alterra further aims to mobilise $250 billion globally by 2030 by steering private markets towards climate investments.

By 2030, emerging markets and developing economies will require $2.4 trillion every year to address climate change, the Cop28 presidency said.

Globally, climate investments are still not at the rate required since “I think it [needs] a little bit of courage and I think it's a new thing that people are not used to”, Mr Al Ameri said.

“All the incentives been given to everyone, all the governance is aligned and all the regulations and rules have been aligned to push this investment. I think we're going to see a lot of it come.”

Another key investment trend globally is artificial intelligence, with a huge focus on data-driven economies that are aiming to capitalise on the technology to expand.

“The economies that … are still manually driven, I think they are where the huge risk comes and you need to really look at them differently,” Mr Al Ameri said.

The executive said he also uses AI to make decisions but stressed that it has been supportive only as a tool.

“Human interference is always needed, especially at this stage,” he said.

While mistakes happen, AI “can run scenarios that no human can cover up”.

“So, I think it's a very good tool for decision making,” the executive said.

Looking ahead, the company, which reported assets of Dh140.4 billion in the first quarter, expects to post top-line and bottom line growth this year.

“We have big plans for our platform … I believe there is huge potential that still has to be unlocked in the coming future for all our companies. There is a lot of potential to grow outside as well as in the region here and be, really, a champion of the UAE,” he said.

“I believe that we have the right infrastructure, the right people, the right time, the right resources to do everything. It's only pushing to get it done.”