Amanat vice chairman's prescription for a future of healthy growth

Amid the hubbub of high-powered chatter in a crowded lounge at the World Economic Forum's Annual Meeting last week, Dr Shamsheer Vayalil cuts a relaxed and congenial figure as he tells me that Amanat Holdings is taking up most of his time right now.

He has been its vice chairman and managing director of the investment company since November 2017, and since then he has overseen a ramp-up in its deal-making activity.

“It’s now almost more than a year with the company. It’s now the second stage of Amanat. When we came in, it was the deployment [of capital] that was the biggest challenge. Now we have deployed close to 80 per cent of the capital, now we need to make sure that whatever we acquired is in the right health and then make sure we create those platforms that we want to do.”

In late 2014, Amanat was created out of a greenfield IPO on the Dubai stock market. The company raised Dh2.5 billion overall, including from 37 prominent founding shareholders, to invest in education and health care assets.

Dr Vayalil, who is the founder of VPS Healthcare, which owns the Burjeel Hospital brand, says that his subsequent involvement in the company had not been planned.

"[It] just happened accidentally. In VPS, we were at a stage where, I remember, my chief financial officer, came to me and said 'we have too much on our plate, let's now start consolidating, let's do an IPO, just stop the growth'."

So when the opportunity to invest in Amanat arose, it seemed a good fit, and another chance to play to his strengths; “growth, expansion, deal making, driving value”.

He founded VPS in 2007 and it is now a health services provider across markets including the UAE, Oman and India. Its website says it operates 20 hospitals, over 125 medical centres and has 10,000 employees.

“We were very good at developing brands and, I think, that was what Amanat was lacking at that point of time.”

His involvement in Amanat has coincided with a change of pace in terms of its investment philosophy.

“It used to be more passive, now it has taken a more aggressive approach in terms of taking an active role in the investments. That is facilitated by the know-how of VPS as an operator,” he says.

However, he is keen to caution that the strategy is balanced between remaining efficient and not losing out on any opportunities.

“There is a lot of value that we can unlock by doing it at the right balance. We want to make sure that we preserve the governance and compliance – whether at the board level or disclosures – and we don’t want to have issues. It has been a great story so far.”

The strategy also gives equal weighting to its two main sectors of focus.

"So we have assets; which are three in health care, three in education and one is a social infrastructure deal in education," he says.

He says that Amanat wants to create “platform investments”, these are essentially established companies which it buys into and then develops.

However, Dr Vayalil stresses that Amanat’s public listing marks it out from typical private equity companies in that there is less pressure over exit strategies. Supporting the growth of the education and healthcare sectors, in line with the overall development goals of the UAE and other countries in which it operates, is also a consideration.

“This is a public equity play. These are sectors which we have to think of a more longer-term approach as well. Especially at this point when the government budgets [in the region] talk about a lot of stress on these two sectors. So we want to have a balance but we don’t want to be ever-green and be silent and just put the money and then we don’t follow up. We want to make sure there is a responsibility for shareholders.”

The public listing and the governance requirements that come with it is also “a big difference” compared to perhaps the most well-known private equity firm, Abraaj. Dr Vayalil acknowledges the “trust deficit”, especially with international investors, in the wake of allegations of the misuse of investors' funds at Abraaj, which led to its collapse last year. Could this impact future fund raising efforts for the private equity industry in the region as a whole?

“We could keep on complaining but we would like to see the glass as half full. We have seen a clear gap in terms of a good equity play and I think we are poised to fill that gap. We are actively looking for further institutional investors [whether] at Amanat [Holdings] level or coming at platform levels. We want to create an ecosystem. We don’t just want to be a money-making machine, we want to be responsible to the communities we serve.”

There are also plans to expand into new markets but Amanat won’t range too far before making sure it can succeed in the immediate region.

“We are trying to start looking at Egypt and neighbouring places. We want to understand, we want to take one step at a time and take opportunities that are good for Amanat.”

Kerala-born, he is a physician by training, and now is also an entrepreneur, an investor, and a philanthropist. He does not miss the day-to-day of being a doctor and his "eyes and ears were very open" for opportunities throughout his time practising medicine. His heart was always closer to business, anyway.

“Being a doctor, I could understand what a doctor thinks, and I saw what the patient wants. I saw I could connect the gap. I could see what was existing and what was lacking. [That’s what] exactly happened in Abu Dhabi when I was working in the government sector. I went and looked at a lot of private companies as well.”

He has always been entrepreneurial, Dr Vayalil concedes, even when at school. The words he uses when he describes one of VPS Healthcare’s biggest projects to date are also more like an investor would choose, rather than a doctor’s.

“We have a cancer centre that is getting ready, that we will open this year. That is a 400-bed hospital in Mohamed bin Zayed City. That is going to be one of our biggest openings ever done in our entire history. We are very excited about that project and I hope it will do a lot of good to the whole region, not just for Abu Dhabi. We have the most modern technology; we are trying to fill it up with the right resources. We don’t just want to build a fancy facility and not to have the right drivers to take care of that particular vehicle.”

He is an obvious role model for anyone dreaming of starting their own venture.

“If I look at my success, it is a little bit of my capabilities or talents [combined] with the opportunities in the market. The UAE has got a very special formula to make successful people. That comes starting from the leadership to the ministries, various bureaucracies, ease of doing things.”

Ultimately though, he says, to become a successful entrepreneur you have to be willing to take risks.

“[There will be] hundreds of people that can discourage you, that can tell you it is a big risk and you can’t reach anywhere but the whole thing is you should have the ability to follow your gut and take the call. The biggest risk is not taking the risk at all.”

This bullishness also comes through in his own outlook for the year ahead.

“I feel more optimistic than ever. We have seen our businesses growing because we come up with new technology, efficiency, scale. If you follow those principles, 2019 is going to be a great year.”