UAE asset management firm Gulf Islamic Investments (GII) is bullish on the business growth potential of Saudi Arabia, with its various ventures already in place on this oil-rich peninsula.
For starters, GII is leveraging on its healthcare investments to expand within Saudi Arabia and to the rest of the GCC region – via control of Almeswak Dental Clinics, obtained in 2021, and Abeer Medical Company three years later.
Co-Founder and Co-CEO Pankaj Gupta told IFN Investor that structural changes have been taking place at Almeswak, which he described as being run mainly as a bolt-on strategy for GII with inorganic growth. “We are clearly looking to acquire more dental and related businesses in the region.”
When GII bought the stake from private equity firm Jadwa Investment, Almeswak had no operations outside Saudi Arabia. After the deal was completed, Almeswak acquired some business in the UAE and is actively seeking potentials elsewhere in the GCC region.
Pankaj said there are plans to add other strategic business opportunities to Almeswak as GII has also acquired some dermatology outfits and is looking to obtain more of such businesses in the region.
“Changes taking place in the background will make Almeswak a very strong candidate for IPO after the next 12 months. Our investors are supporting it, the market is looking forward to this public offer.”
For Abeer Medical Company, completion of the deal in January 2024 has led to it acquiring a hospital in Riyadh. Being a recent investment, Pankaj said further expansion potentials are being explored, including talks with some healthcare operators from Singapore.
Tapping into GII’s global connections, Pankaj said: “We are looking at more opportunities in healthcare. I think we understand this space well. We can create synergy with existing players. We bring intelligent capital, a lot of strategy inputs wherever we can to bring operation expertise”.
Describing healthcare as one of the four business verticals for GII – with the others being food, logistics and education – Pankaj said Emad Bakeries in Jeddah is already the largest manufacturer of bakery business there.
“It was part of our Saudi investment strategy, with a focus on agriculture from a green business perspective. From farm to fork kind of thing, as they say.”
GII aims to expand Emad from a one-city business to a pan-Saudi player and is exploring various options – including joint ventures, whether shared operations or pure investments – to capitalize on its strength and eventually grow Emad to be a regional player.
GII will keep its focus on Saudi Arabia “because as everybody knows, Saudi Arabia is the largest player in GCC. Opportunities are coming. GII aims to act as a conduit between local, regional and global players”.
Pankaj said GII expects close to “US$1 billion worth of opportunities in our curated pipeline” for Saudi Arabia, having proven that the firm can draw in foreign direct investment. “Any investor looking to seeking sustainable returns cannot afford to ignore Saudi Arabia or the GCC, for that matter.”
Logistics is another vertical being given focus, in partnership with Canada’s Brookfield Asset Management – having inked a US$300 million joint-venture with Logipoint, a subsidiary of Saudi Arabian giant SISCO – to create new warehousing infrastructure, starting in Riyadh and Jeddah.
This a strategy continuing from when GII bought in 2017 a million square feet of Amazon warehousing in Dortmund, Germany and exited in 2020 with an 18% return on investment. “We exited realizing that the GCC is a bigger market for logistics, ahead of the e-commerce boost from the COVID-19 pandemic.”
Success with the UAE warehousing drew in Brookfield’s first major investment into GII assets and helped forged a partnership that Pankaj expects will continue for more ventures together within the GCC region.
Even with so much on its plate currently, GII is not letting up on its venture capital (VC) operations despite finding other asset classes, like private equity, to be more attractive. “We strongly believe in a portfolio approach and in two to three months’ time, GII will be giving a pleasant surprise on the VC side.”
The firm also recently launched its US$100 million GII Debt Fund-1 as part of a credit strategy as investing in real estate has not been lucrative with prevailing high interest rates and moderate rental rates, resulting in REITS not being as popular as they should be.
“The debt fund, I won’t say is a replacement, but at least it is filling the gap of income opportunities for those investors who are looking to have an income product.”
