Waha Capital, which counts Abu Dhabi’s Mubadala Investment Company as one of its shareholders, plans to invest about $200 million (Dh734.5m) on acquisitions and US equities in 2020, as markets become more attractive to liquid investors amid the Covid-19 pandemic.
"Whenever there is a crisis, there is a great opportunity," Amr Al Menhali told The National in an interview.
As the coronavirus spread globally, it forced countries to implement lockdowns and paralysed industries, rattling investors and hammering stock markets worldwide. US stock markets fell sharply before recovering after more than $2 trillion in stimulus was rolled out by the government.
The company operates two business divisions; a private investment arm that invests directly in high-potential companies, and its asset management division, which invests in proprietary and third-party funds in globally-listed equities and credit.
The Abu Dhabi-based firm is eyeing investments in a number of US-listed companies operating in finance, healthcare, telecoms, FinTech and e-commerce, Mr Menhali said.
“In the US market, we have seen some good prices in certain companies which are listed,” Mr Menhali said. “We have decided to buy into these companies to get us a proper return this year and the coming years because those companies are very solid and we believe in the performance.”
The investment in US stocks is expected to be in the range of $120m to $150m.
The company will also look to invest as much as $40m on acquisitions in international and regional markets. Mr Menhali did not provide details but said they will be investing in one or two companies.
“We are looking at the business that gives us cash yield or recurring income. So, this is the criteria which we are looking at the new investments,” he said.
Waha currently has investments in various companies including Dubai-based FinTech company Channel VAS, Dunia Finance, National Energy Services Reunited and Petronash Holdings, among others.
It divested its stake in New York-based aircraft leasing company AerCap last year that generated net cash of Dh933m to the company.
“Investments which we are doing now should have a good return to Waha in the next three to five years,” Mr Menhali said.
“In addition to that, the current assets or investments which we have, we will be reconsidering or turning around and exiting in the next 12 to 18 months to reinvest in new opportunities.”
Waha Capital is also planning to launch a Shariah-compliant fund by the end of 2020, with seed funding of $30m to $50m to invest in equities and sukuk.
The AerCap exit "boosted our cash reserves to an extent that we have settled a small facility which we had. We are fully funded and do not need to tap any debt market any time soon,” Mr Menhali said.
Waha posted a Dh616.3m loss last year. However, Mr Menhali said he was optimistic the company will do well financially this year on the back of new investments.
“I am optimistic about 2020, that it will be much better than our position in 2019. We have cash, we are well prepared and we need to take advantage of opportunities,” he said.
Waha Capital’s total assets at the end of last year stood at Dh9.3 billion, compared to Dh11.6bn from a year earlier. The company’s cash and cash equivalents reached Dh765m in 2019, up from Dh429m in 2018.
