Mumtalakat, the sovereign wealth fund of Bahrain, expects double digit growth in income in 2019, partly driven by a 50 per cent forecast jump in revenue at Aluminium Bahrain (Alba), one of its key assets, its chief executive said.
State-backed Alba's Line 6 expansion project will come online this year, making it the world's largest single-site smelter. The expansion will nearly double production to 1.5 million tonnes per year and has the potential to increase revenues of Alba by 50 per cent per year, Mahmood Al Kooheji told The National on Wednesday.
“Our story has been about growth and diversification for the past five years and I am positive we will continue seeing growth – in particular, double-digit growth in 2019,” he said. He did not disclose figures as the company is private.
Established in 2006 with a mandate to grow Bahrain’s strategic non-oil and gas assets, Mumtalakat has diversified its portfolio of assets locally and globally. Alba and National Bank of Bahrain are among Mumtalakat’s assets in the Arabian Gulf state, while car maker McLaren Group is one of its international investments.
Mumtalakat remains open to an initial public offering of UK-based McLaren, which is its biggest investment in Europe, but has yet to propose a timeframe.
“The car sales are excellent and the company is growing, so we’re very happy with that,” he said.
Around 70 per cent of Mumtalakat’s around $16 billion portfolio is in the Middle East, while 22 per cent of holdings are in Europe and 8 per cent are in the US, Mr Al Kooheji added.
The fund has invested $2bn in its home country in the last three years, according to the chief executive, but seeks new opportunities in 2019, including in Asia, Russia and Europe, while planning “at least one divestment” this year. Targeted sectors for new investments include education, healthcare and renewables.
Mumtalakat already has healthcare interests, including an equity stake in Italian healthcare firm KOS Group, which provides long-term care and rehabilitation services, since 2016.
This year, Mumtalakat is actively hunting for investments in renewable energy, a sector in which it does not currently participate. “Where is the fault here, why have we not invested in such a high-growth sector as renewables? The fault is us, we need to get more active here and we are doing this now,” the chief executive said. There are no deals in the pipeline yet.
Mumtalakat last year invested an amount totalling one-third of a $100 million fund called Al Waha Fund of Funds set up by Bahrain Development Bank to invest indirectly (via partner venture capital firms) in Bahraini start-ups. But an indirect investment such as this is the furthest Mumtalakat would go into financing SMEs, as it focuses on larger ticket sizes, Mr Al Kooheji said.
The sovereign wealth fund’s $600m sukuk issuance last week will be used to pay down existing debt maturing in 2019 and 2020, and there are no further fundraising plans for the foreseeable future.
