Arbah Capital ends 2020 with four successful investments, raising Assets Under Management to 1.6 billion riyals
The year 2020 was a difficult year by all standards around the world in every aspect triggered by the Covid-19 pandemic, and our thoughts and prayers go first and foremost to all those that have suffered loss during this very difficult time.
Arbah Capital worked hard during this period despite the circumstances and was able to finish this year with exceptional success, thanks first to God Almighty, and then to the clear strategy of the Board of Directors and the diligent work of the Executive Management and all the staff of the company.
Arbah Capital was able to close two acquisitions in the US, and provide a refinancing for a real estate project located in the United Kingdom, with total values of investment exceeding $ 150 million, thus achieving the highest gains in AUM in the company’s history.
Arbah managed to achieve a net profit of around 6.4 million riyals, compared to around 4.8 million riyals for the year 2019, with a growth rate of 32%, showing strong growth. This growth in profits was driven especially by the new investments in international real estate, and there was also a strong contribution from the increase in the percentage of portfolios managed by Arbah as an agent in the Saudi stock market.
On this occasion, Mr. Saud Al-Ansari, Chairman of the Board of Directors, said, “We took a decision in the Board of Directors at the end of 2017 to change the strategy of Arbah Capital, to expand geographically and diversify our investment offering from just local stocks and real estate. What we see today is the result of that critical decision, as AUM has increased from 200 million riyals at the end of 2017 to about 1.6 billion riyals by the end of 2020. There is no doubt that what has happened in 2020 for Arbah is a success story that we are proud of, thanks to God Almighty and then thanks to the concerted efforts of all our employees. On this occasion I thank the shareholders for their support and confidence, I also express my appreciation and gratitude to my colleagues, members of the Board of Directors and the committees emanating from it, for their cooperation and solidarity in developing the strategic plans and goals that we have achieved. I also express my heartfelt thanks to the Executive Management and all the company’s employees for their clear efforts and professionalism in their work.”
Mr Al-Ansari added: “We, in Arbah, aspire to continue working to achieve profitability for our investors and shareholders, and we also aim to grow the business in line with our ambitions to become the largest investment bank in the region. Profitability and growth in AUM are our main drivers for the next five years so that we become one of the most prominent and respected investment houses in the region.”
Mahmood Al-Kooheji, CEO of Arbah Capital, said, “I am very proud to be able to announce the company’s success for the year 2020 despite the great challenges that the world has faced, as we have made investments in various fields in the United States and the United Kingdom.”
The first investment was the acquisition of five long-term leased industrial buildings by large and well-known companies such as Walmart, Tesla and AT&T with a value of $ 75 million and an expected return of 9.50% annually to be distributed quarterly. This portfolio has already significantly increased in value through Asset Management efforts by the team.
As for the second investment, it is a refinancing of a real estate project in the center of Glasgow, Scotland, valued at 7.5 million pounds with an expected annual return of 9%. This particular investment was a great challenge for the company despite its small size due to the Brexit issues raising concerns. However, again Arbah’s successful Asset Management in the project provided investor confidence in raising the funds needed in time.
A third recent investment was the acquisition of a medical complex in the heart of the city of Philadelphia, USA, which is already leased to several well-known names in the medical sector, including Temple Health (part of Temple University) and Ambrosia Treatment Center. This has proven to be a very sound investment in a very defensive sector and in a location which is gentrifying, driving real estate price growth. Arbah was able to acquire the asset at the height of Covid at an attractive discount to market valuation at a total acquisition value of $ 59 million, providing an expected return of 9% for investors annually, distributed quarterly.
Each of these sectors has proven to be defensive and resilient, a testament to the accuracy of our research and market insight. Our capabilities were exceptional in finding suitable opportunities and the right strategic partners to work with them. These factors have grown the Assets Under Management by Arbah to nearly 1.6 billion riyals, which is more than the amount which existed at the beginning of 2018.”
Earlier, Mr. Al-Kooheji emphasized Arbah Capital approach, saying: “The company’s basic strategy is to create opportunities for its investors in the appropriate growth sectors, and to organize investment in those sectors with key partners who have a proven track record. Arbah Capital’s reputation and professionalism attract the best partners in class to provide value-added investments, leading to the acquisition of distinctive assets in excellent locations, mainly in defense sectors such as infrastructure, social, and health. This strategy has proven itself to be very successful by the quality of the investments Arbah has made, and the profits generated, to make Arbah one of the leading and most respected investment banks in the region.”
Speaking about the products that will be put on the market in early 2021, Mr Al-Kooheji added, “We are currently working on providing innovative investment products aimed at building more assets in the vital and defensive sectors, and these products we believe will provide investors with an acceptable degree of stability at a time of a high degree of volatility in other markets. “
Mr Al-Kooheji continued, “I would like to thank the Board Members who were very supportive, and I would also like to thank all of Arbah’s team who continued to keep the company at the forefront through their hard work and dedication. We in Arbah believe that we will always differentiate ourselves and this is what has led to these outstanding results. “