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Abu Dhabi, UAEThursday 15 November 2018

Exclusive: Bahrain's Mumtalakat has $15bn under management and open to exiting GEMS

The kingdom's sovereign wealth fund has invested in 60 companies with 36 per cent of its portfolio outside the country

Mumtalakat chief executive Mahmood Al Kooheji is bullish on education and healthcare. The National
Mumtalakat chief executive Mahmood Al Kooheji is bullish on education and healthcare. The National

Mumtalakat, the sovereign wealth fund of Bahrain, is now managing about $15 billion in assets and is open to selling its stake in GEMS Education, its chief executive said on Wednesday.

"If the opportunity arises, we will leave [GEMS]. If there's a long-term prospect then we don’t mind [staying]," Mahmood Alkooheji said in an interview with The National at the Future Investment Initiative conference in Riyadh.

Blackstone, Dubai-based Fajr Capital, Mumtalakat and the Varkey Group, which is a majority owner in the education provider, are considering selling some or all of their stakes in GEMS in a deal that could value it at about $4 billion, Bloomberg reported earlier this month. GEMS, which owns and operates 47 schools and nurseries across the GCC, was slated to list in London but delayed its initial public offering according to media reports in June.

"One of our portfolio companies is signing a deal here at FII," Mr Alkooheji said. "Education is important for us, renewable is important for us, technology is important for us. these are the sectors. Our philosophy is that we want to invest in the sectors that have the potential to grow and gone past the stage of being too risky."

Investments in the education sector, one of the higher growth segments in developed and developing economies, have been on the rise in recent years in the Middle East and beyond, as demand for schooling grows with the uptick in population numbers. 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. Aluminium Bahrain 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.

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The sovereign wealth fund’s assets have grown to over $15bn from $10bn and the number of companies in which Mumtalakat has a stake has more than doubled to over 60 local and international companies across 11 sectors. Of those, 65 per cent are based in Bahrain and the broader region, while 28 per cent is in Europe and 8 per cent in the US.

"When we started in the beginning we were not profitable but for the past five years we have been showing, every year an increased profit," Mr Alkooheji said. The sovereign wealth fund reviews about three to four deals a year, he added.

Looking forward, Mr Alkooheji said privatisation of healthcare by GCC governments and opening of Saudi Arabia's economy, the region's largest, presents tremendous opportunity.

"Healthcare is an area we like and we are looking to make some investments in Bahrain and in the region there is a lot of potential in the region," he said. "Saudi for the region is the economy. What happens with Saudi Arabia will affect the whole region and growth of the Saudi market means growth of the entire region."