OMINVEST inaugurates its landmark project OMINVEST Business Centre

OMINVEST Business Centre was opened under the patronage of His Excellency Mohammad Al Zubair, Advisor to His Majesty Sultan Qaboos bin Said for Economic Planning Affairs

MUSCAT: OMINVEST (Oman International Development and Investment Company), one of the largest investment companies in the Middle East, yesterday opened its state-of-the-art OMINVEST Business Centre (OBC) conceptualised to be one of the smartest and most modern office complex in Oman.

OMINVEST Business Centre was opened under the patronage of His Excellency Mohammad Al Zubair, Advisor to His Majesty Sultan Qaboos bin Said for Economic Planning Affairs in the presence of a number of His Highnesses, board of directors and executive management of OMINVEST. Following the inaugural ceremony the guests were taken on a tour to show the landmark building.

OBC, which sets a new benchmark in Oman for commercial design, incorporating state-of-theart features, has been established to demonstrate OMINVEST’s commitment to promote economic and social growth in the Sultanate. Built by OMINVEST’s subsidiary company Oman Real Estate Investment & Services (ORIS), the OBC is an Integrated Tourism Complex (ITC) which has freehold status and is available for both local and foreign investors.

It is strategically situated in the heart of Muscat and is 10 minutes away from the Muscat International Airport.The new project is also expected to help OMINVEST diversify its revenue streams and create durable value for all stakeholders.It is also part of OMINVEST’s vision to be the largest and best performing publicly traded investment company in the MENA region within the next five years. OBC will also house the headquarters of OMINVEST at the penthouse.

The inaugural ceremonyopened with a speech by Khalid Muhammad Al Zubair, Chairman ofOMINVEST. During his speech he spoke about OMINVEST’sjourney in the local and regional market since it was established in1983.

Khalid Muhammad Al Zubair said, “Over the last 35 years, OMINVEST has made remarkable progress and has evolved nimbly to be able to seize emerging opportunities and respond to new challenges. It has been both a gratifying and a humbling journey, which began in 1983, when our honourable father and his colleagues friends laid the foundation of OMINVEST. Their vision and values have been the guiding principles for OMINVESTever since and will continue to drive our successes in years to come.”

He added, “We attribute OMINVEST’s achievements of the last three decades to our visionary founders, wise leadership of the succeeding chairmen and the Boards of Directors, and smart stewardship of our management teams. We are profoundly thankful to the esteemed leadership at CBO and CMA for guiding and supporting us on bringing innovative transaction structures to the market and participating in large-scale capital market activities to increase liquidity and help build investor confidence. We believe that a healthy discussion and a close interaction between the policy makers, the regulators and the private sector entities will strengthen businesses in the key sectors and help stimulate economic growth in the country.”

He further added, “In 2014, we went through some interesting discussions at OMINVEST. Our board and the management had various brainstorming sessions, where in, we articulated, refined and agreed on our investment philosophy and the business model – to be able to meet emerging challenges and seize rewarding opportunities.”

Sharing key tenants of OMINVEST’s investment philosophy, which, essentially drives its investment decisions, the chairman said, “It’s based on various key principles that include: buying high quality businesses at attractive valuations and keeping a long-term perspective, investing within our key areas of expertise, enhancing diversification of our investment portfolios to reduce systematic and concentration risks, keeping leverage at modest levels and well within our capacity to borrow and service the debt, adhering to the classic buy and hold, value-oriented investment strategy – the way it has been practiced by the most admired visionary investors of the world.”

Speaking of the business model, Khalid Al Zubair said, “It entails building diverse business platforms and making sure our businesses are managed by highly capable professional management teams with the utmost integrity and alignment with all the stakeholders. We strive to add value to our portfolio companies through our active participation at the boards. Our mandate is to help our key businesses come up with the right vision, values and strategic direction, build the core leadership teams, adhere to the highest standards in corporate governance, andhelp achieve performance targets in key areas. While we support our portfolio companies to achieve major milestones, we ensure not to intervene in day to day business operations, which are best left to the management teams.”

He said, “As always, the challenge is in execution, it’s in the successful implementation of the policy and the strategy framework. At OMINVEST Group, we have endeavoured to attract and retain the finest human talent, who have been able to effectively respond to challenges and capitalise on opportunities.”

Elucidating OMINVEST’s revenue growth and diversification, he said, “I am pleased to report to you that as a result of successful implementation of our investment philosophy and the business model, we have been able to enhance OMINVEST’s revenue diversification and significantly reduce downside risks to our profitability. For instance, in December 2014, banking sector investments accounted for 82% of our revenues. By September 2018, banking accounted for just 46% of the revenues, as our new businesses in other sectors including insurance, leasing, and real estate have added additional revenue streams. We achieved all this with a combination of organic and in-organic growth initiatives. For instance, in terms of in-organic growth, the big leap came through our landmark merger with ONIC Holding in 2015. The merger transformed OMINVEST into a much bigger and a more diverse company. And, in terms of organic growth initiatives, we began building equity stakes in blue chip companies during the recent downturn, and, increasing capital allocations to our subsidiaries for growth opportunities in the insurance, private equity and real estate sectors.

He explained, “In addition to pursuing large-size value investments, we have also strengthened OMINVEST’s balance sheet by further optimising its capital structure. Earlier this year, OMINVEST successfully raised OMR 61million in perpetual bonds – a source of permanent capital at attractive terms to align our long term investments with longer duration liabilities. As I mentioned, our investment policy guides us to maintain modest leverage. I am pleased to share with you that despite considerable growth in our investment portfolios over the last few years, OMINVEST’s debt/equity ratio still stands around 0.85x, which is well below the industry averages.

“Our future focus is to further transform OMINVEST into a welldiversified investment company of the 21st Century by embracing innovative technologies to stay impactful in the digital age. We aim to accomplish this by making longterm value investments in new growth markets and in businesses that will be the dominant forces in their respective sectors in the decades ahead,” he said.

Detailing major initiatives across OMINVEST’s strategic platforms and the progress made by its key businesses, the chairman said, “Banking is OMINVEST’s core focus and a major area of expertise. Our banking sector investments are diverse in nature, as each of the players commands a unique market position – and they all are thriving.”

He said, “We are proud of our long-standing subsidiary Oman Arab Bank (OAB), which is growing steadily and has delivered highly attractive returns for its committed shareholders of the past 35 years. Despite difficult market conditions over the last few years, OAB has achieved healthy growth and remarkable transformation. The bank has significantly improved its KPIs and moved-up the growth curve, by heavily investing in banking technologies, customer service, human capital and branch network. Another major focus at OAB has been to prepare a new bench of leadership comprising the brightest Omani professionals. As a result, OAB recently passed on the leadership baton to a highly capable management team, led by its newly appointed CEO, Mr. Rashad Al Musafir.OAB is likely to embark a new journey, as it is engaged in a pivotal transaction – its potential merger with Alizz Islamic Bank. This merger, if completed, will enhance scale and capabilities of OAB’s banking platforms and enable it to provide a broader range of products and services to its conventional and Islamic customers.”

Informing that National Life, OMINVEST’s subsidiary in the insurance sector had a very successful IPO in Q3 of 2017, despite difficult market conditions at that time, Khalid Al Zubair said, “We are pleased to witness National Life emerge as the largest insurance company in Oman and with a growing presence in rest of the Middle East. We are pleased to see that National Life is actively diversifying its revenue model. For instance, National Life generates 55% of its insurance revenues from the UAE; it has started successful operations in Kuwait; and, it is gearing-up to further expand in large insurance markets like Indonesia and Saudi Arabia.We stand ready to provide additional support to our insurance businesses to enable them to scaleup. Our insurance companies are positioned well, are run by highly capable management teams, and, have delivered performance exceeding expectations.”

Speaking of OMINVEST’s major recent initiative Jabreen Capital, the chairman said, “With OMR 100 million in paid-up capital and an investment portfolio worth OMR 275 million, Jabreen is one of the largest investment companies in the country. Jabreen holds sizeable equity stakes in Bank Muscat, Ahli Bank, IGI Insurance, Takaful Oman and Al Ahlia Insurance. Particularly, with Jabreen’s 9.4% stake in Bank Muscat, we are excited that the country’s largest Bank with one of the finest leadership and management teams has become our Partner. We will continue to seek such great affiliations and attractive investments in the future to increase value for our Shareholders. Such collaborative partnerships also allow us to play a more instrumental role in fostering economic growth in Oman. As a Private Equity specialist, Jabreen is mandated to further diversify our investments into new growth sectors and geographies. Currently, Jabreen is building stakes in the education sector and exploring opportunities in the healthcare, fin-tech, logistics and consumer sectors. In the years ahead, we expect Jabreen to be a major source of diversification and growth for OMINVEST.”

With reference to OMINVEST’s investment in the leasing sector, he added, “NFC enjoys 40% market share and has maintained one of the best KPIs in the sector. We think that with an equity-base of close to OMR 100 million, a lease book of around OMR 450 million, and, a highly capable management team, NFC has the capacity to expand across the region and seek acquisition opportunities in other growth markets. With the emergence of fin-tech as a major force disrupting the finance sector across the world, NFC is proactively working to further optimise its business model, expand range of its products and services to become even more efficient, and offer better value to its customers.”

Highlighting that OMINVEST is seeing promising opportunities in the investment banking and asset management businesses, Khalid Al Zubair said, “In December 2016, OMINVEST, together with partners OIF and Arab Bank Switzerland, established U-Capital to provide highest quality services to our valued clients. U-Capital has made meaningful progress since then. It enjoys a strong track and is well positioned to further strengthen its market position in these areas. U-Capital has strong deal pipeline for advisory mandates and is scaling up its asset management products and brokerage services across the region.”

Explaining that real estate has become a key focus area for OMINVEST, he said, starting small just a few years ago, our Real Estate subsidiaryORISwasasmalldepartment within OMINVEST. Now, ORIS has grown into a full-fledged real estate investment and services company and is engaged in developing prime real estate projects and providing real estate management services to its clients.”

He said, “I am pleased to acknowledge that the credit to build the OMINVEST Business Centre goes to ORIS team, who worked tirelessly to complete the project on time and well below original budget. ORIS has undertaken largescale, state of the art, real estate projects and entering into JVs with highly reputed partners. We expect ORIS to become a significant source of recurring revenues for the group. Our job at OMINVEST is to conceive and nurture new platforms like Jabreen and ORIS and see them off to become independent, self-sufficient companies.”

Informing that OMINVEST has a long track record of performance and steady growth in profits and dividends, Khalid Al Zubair said, “I am pleased to share with you that 2018 has been an important year for OMINVEST, as we are reaping fruits of the crops we have been sowing for the last few years. Most of our subsidiaries and associates have performed well. As a result, for the nine months ending September 2018, OMINVEST maintained strong growth momentum in its profits. Touch wood – we are expecting to close the year on a strong note. As Amazon founder Jeff Bezos said the other day “the great quarter Amazon investors are celebrating today was planned three years ago, and right now, we are planning a quarter three years from now”. No doubt – we have a similar mind-set at OMINVEST and do not hesitate to learn from the wisdom of the most successful business leaders around the world.”

He added, “As we grow OMINVEST and become even more successful, we have a much higher responsibility towards our society and communities. Therefore, we are passionately involved with various small business enterprises, entrepreneurs, students through our collaborations with Environmental Society of Oman, Zubair Small Enterprises and Injaz Oman to help make a difference in the lives of our citizens.”

Abdulaziz Al Balushi, group chief executive officer of OMINVEST, said, “OMINVEST will continue to play a key role in Oman’s economic growth, creating job opportunities for Omani nationals, helping businesses grow and attracting foreign investments to the Sultanate.OMINVEST is heavily invested in the future prosperity of Oman, with a strong focus on investments which will continue to grow to create greater value and deliver a positive impact on Omani economy and the region. We are pleased to open the OBC which is poised to be the most desirable business address in Oman, setting new standards for business productivity, energy efficiency and environmental responsibility.”