Waha Capital, an investment company based in Abu Dhabi, aims to invest up to Dh400 million in health and education this year as it anticipates opportunities from an undersupply of clinics, hospitals and schools in the UAE.
Michael Raynes, the chief operating officer of Waha, mapped out the company's plans yesterday after it posted profits of Dh85.3 million for the first quarter of the year, a more than fivefold rise from the Dh15.9m profit in the same period last year.
The rise was fuelled by strong performances from its direct investment in the New York-listed aircraft leasing company AerCap, the consumer finance company Dunia Finance and the company's advisory business. But the company plans to extend its reach for the first time into health care and education from this year in an effort to maximise returns and reduce risks through diversification.
"I am hoping we will make an investment in healthcare services in the UAE this year," said Mr Raynes. "We have concluded it's unlikely we will acquire a hospital in Abu Dhabi, for example, because we think there's an oversupply, particularly around hospitals in Abu Dhabi. But we would look at investment in the northern emirates, where there's an undersupply."
Anticipation of future regulations making healthcare insurance in the northern emirates mandatory would help to drive revenues for providers in the sector through increased use of hospitals and clinics, he said. Mr Raynes expected buying opportunities to emerge in the sector from consolidation as small players struggled to keep up with a push by regulators towards better quality of services.
As well as investment opportunities in hospitals in the northern emirates, Waha is also eyeing openings in clinics in Abu Dhabi and across the UAE and pathology.
The Abu Dhabi Government is striving to improve access to health care in the capital, with the planned opening this year of Cleveland Clinic Abu Dhabi an example of its ambition.
But as far back as 2010, federal government officials reported poor medical services and a lack of nurses and doctors in hospitals across Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah.
Education is another sector Waha plans to invest in this year. It has recently hired a specialist with experience in managing educational businesses in the region and Europe.
"We want to invest in education in Abu Dhabi as that's where we think the opportunity is," said Mr Raynes. "There's a good supply of education in Dubai but Abu Dhabi is undersupplied."
The company's focus is K-12, although it has also looked at nursery education.
Research by Booz and Company and YouGov in 2011 highlighted a shortage of private schools in Abu Dhabi catering for students in the primary and secondary school age group.
The strategy for investments in both health care and education was "buy and build," meaning the company would purchase a majority stake in an existing clinic, hospital or school with a management team in place, investing to improve standards and expand.
The company planned to invest up to Dh200m in each sector this year.
Salem Al Noaimi, Waha's chief executive and managing director, said in February it had a "significant war chest" to invest from its balance sheet. In addition, it had a Dh1 billion mandatory convertible note, approved by shareholders in reserve.
As Waha ventures into new sectors it is reviewing its investments in existing areas.
In February, it sold Waha Offshore Maritime Services, its wholly owned oil and gas services business, to Stanford Marine Group, the oil and gas services business in which it has a 49 per cent shareholding.
"We also focusing on selling non-core investments," said Mr Al Noaimi. "But on all of our investments, if we got a good bid tomorrow, we'd consider it."
Waha, which is 15.4 per cent owned by Mubadala Development, a strategic investment vehicle owned by the Abu Dhabi Government, started as an aircraft leasing company known as Oasis International Leasing in 1997.
The company has evolved to add financial services, oil and gas and property to its investment portfolio.
