It is now eyeing the next stage of its development, including an expansion of its client base and the anticipated relaunch of its Libya Fund. The company started out with a mandate to manage its own propriety capital, as well as a portion of the capital of select Government of Abu Dhabi institutions. 

 

For 30 years, it was fully owned by ADIA, but in 2007, in what head of asset management Mohammed Al Hashemi describes as “the most significant change  in the company’s history”, ownership shifted to the newly-established Abu Dhabi SWF, the Abu Dhabi Investment Council (ADIC), which retains a shareholder stake today. 

 

 

Over the past four years, the firm has built up its own fund portfolio and started to manage third-party assets for international clients such as Germany’s Frankfurt Trust and Hong Kong’s Quam, in an early sign of its international ambitions. “I suppose there are really three pillars to how we operate,” says Al Hashemi. “There are our own sponsored and managed funds, then there’s another category of our offering where we sub-advise, and finally there are the separate accounts, segregated customised portfolios.”

 

Invest AD’s total AUM is currently split approximately 60/40 in favour of the separate and sub-advisory accounts, and Al Hashemi expects the balance to shift further towards these accounts in the future. However, the firm’s managed funds represent the cornerstone of its business, performing the dual role of  attracting their own investments and driving money into the discretionary side. 

 

“Normally, the funds tend to be more an example of what you can achieve and your capability and an example of your track record performance, the governance, the whole A-Z of how you should be managing a particular strategy,” explains Al Hashemi. 

 

When pitching for institutional mandates for its DPM business, it is the track record of these funds that is showcased to potential clients. “It’s typically a quick decision for that investor to, depending on the amount of money they would like to put down, decide whether the fund is viable for them.”

 

There are currently four funds in the Invest AD canon: the $80m UAE Total Return Fund, the $39m Emerging Africa Fund, the $30m GCC Focus Fund and the

$20m Iraq Opportunity Fund. However, there is a fifth fund waiting in the background, which is set to re-emerge at the most opportune time. 

 

Invest AD’s Libya Fund was initially launched in January 2011, with the aim of being the first fund to take advantage of the country’s estimated $2.2bn bourse. But just a few weeks later, everything changed: the country was plunged into civil war and the bourse was indefinitely suspended.

 

Needlesstosay, the fund was withdrawn, but Al Hashemi remains bullish on its prospects in the post-Gaddafi Libya. “The reasons why we established the Libya fund vehicle, and why we believed in the prospects for Libya, haven’t actually changed,” he says. “In fact, the reasons have become a lot more tempting and stronger now. In Libya you have an economy that has a huge set of needs – improvement in infrastructure, whether its energy, electricity,

social, schools, hospitals. That’s been the case under the old regime and under the changes that are happening right now it still is the case. Secondly, you have a country that has huge resources which could help fund and pay for the development and the needs of the people.”

 

He adds that Invest AD has seen a lot of investor interest in the Libya fund over the past few months, although the fund will not be able to re-open until the stock exchange resumes. At the time of writing, this had yet to happen, but with Gaddafi gone and a process of change underway, it can only be a matter of time.

 

“We feel we have an advantage – we’ve been on the ground in Libya before the changes and we feel we’ve seen the opportunities, we’ve set up a structure and we’ll soon be able to hit the ground running with that,” says Al Hashemi. “We are already doing a lot of the work in the  background, looking at the opportunities and assembling a pipeline so are able to very soon be able to commence looking into it.”

 

 

Like every asset manager, Invest AD’s fund offerings are dictated by investor appetite. However, its core investors just happen to be several of Mena’s own (unnamed) SWFs, which tend to have a more challenging remit. Unquestionably, the firm’s own background helps to attract these big ticket investments. “The fact that our own shareholder is a SWF gives us credibility in the region,” admits Al Hashemi. “Our parentage helps us open doors in that respect. But at the end of the day, we believe we are assessed as much as every other asset manager. We’re assessed as to what we have to offer, how we’re managing that offering and all the other criteria.”

 

Many of Mena’s sovereign wealth funds are required to diversify their portfolios by investing outside their locality, or even the region itself. It is here that Invest AD’s Emerging Africa Fund (EAF) comes into its own – offering ex-Mena exposure to investors looking for something different. Al Hashemi has seen a “significant and growing interest” in African investments over the past 18 months, including North Africa, which has a 30-40% representation in the EAF. But while the firm has a clear interest in North Africa, and is constantly monitoring the changes taking place, Al Hashemi admits that he is more bullish on traditional GCC picks at the moment, including the Saudi consumer story and Qatari banks.

 

With no imminent fund launches, the future of Invest AD lies in the expansion and diversification of its client base. “We have been trying to restructure some products so that they could be put on platforms where we could bring in a greater variety of retail investors,” says Al Hashemi. If successful, these potential restructurings could herald the next “significant change” for the ever-changing asset manager.