Fahad Abdulrahman Al-Mukhaizim

KUWAIT: As part of its efforts to strengthen its leadership in the investment sector in Kuwait and the region, National Investments Co (NIC) achieved exceptional successes at all levels in 2021. Despite the economic repercussions and challenges due to COVID-19, the company concluded several M&A transactions, sell-side mandates and restructuring as well as general advisory mandates.

In recent years, the IBS at NIC translated its tireless efforts into many successful deals, confirming its leading and prestigious position as one of the largest investment companies in Kuwait and the region. It also proved the success of an ambitious and effective strategy based on effective market presence, gaining customer trust, and promoting digital innovation in investment products and services.

In this context, Fahad Abdulrahman Al-Mukhaizim, the Chief Executive Officer of NIC, said that NIC started the year 2021 with a strong pipeline of mandates, including several M&A transactions, sell-side mandates, restructuring as well as general advisory mandates. It also captured many new investments in the infrastructure, credit and information technology sectors.

He noted that 2021 was an outstanding year for the Investment Banking Sector as it played a major role and became the most competitive player locally and regionally thanks to decades of combined experience, a huge range of advisory services and a prominent role in this industry through private equity and alternative investments in the local, regional and international markets.

Investment in technology

NIC said that in line with expanding its investment strategy in the financial technology sector, NIC succeeded recently in investing in the US-based "Pipe Technologies" company, the first trading platform for recurring revenue in the world, which specializes in financial technology. Al-Mukhaizim said that Pipe's valuation of $2 billion was achieved in just under a year since its public launch in 2020, making it one of the fastest financial technology companies to reach this rating in history.

More than 4,000 companies have signed up on the Pipe trading platform since launch, while tradable annual recurring revenue on the Pipe platform exceeded $1 billion and is trending toward $ 2 billion, with tens of millions of dollars being traded every month. In addition to the Pipe investment, NIC invested in several global and regional venture capital funds as well as direct investment opportunities. The direct opportunities include NotCo and DarkTrace.

NotCo is one of the most exciting food technology firms focusing on plant-based alternatives, utilizing patented AI technology. DarkTrace is a global cyber-security leader utilizing AI technology to help clients thwart cyber-attacks. The company also invested with Tiger Global, one of the world's most popular technology investors with a proven history and diversified venture capital relationship.

In addition, Al Mukhaizim said that NIC invested with Pantera, one of the first investment companies specializing in the crypto in USA with AUM of $4.3 billion. Leveraging the technology growth in the Arab world, NIC made direct investments in the delivery industry through the Kuwaiti company Flick and Egyptian company Yalla Fel Sekka.

Investment in international Real Estate

Regarding the efforts of the National Investments Company to close several major deals, Al-Mukhaizim said that the company, in partnership with Altum Capital, increased the annual return from 9% to 10% on its real estate investment located in UK Manchester area. The property is leased to Tesco, one of the giant and reputable retail companies. This higher return is due to the increase in the annual rent of the property since the beginning of 2021, and the abundance of reserves with the project manager. This confirms the success of the strategy of NIC and the sound financial position of investment.

Al-Mukhaizim said that the Manchester property was acquired in 2019 with a total deal value of GBP 44.5 million and an annual return of 10% distributed quarterly. The private placement of the offered shares was subscribed nearly 4 times. This clearly reflects the investors' confidence in NIC and its distinguished products. Al-Mukhaizim pointed out that NIC has a commercial real estate project, located in Pennsylvania, USA, and leased to the global asset management giant Vanguard Group for use as one of its headquarters. The deal has a total value of about $185 million, with an average annual return of approximately 8.2% during the investment period.

Al-Mukhaizim said that the Alternative Investments Dept. showed notable success in new real estate investment in Italy. He highlighted the fact that it invested with a leading Italian developer in logistics warehouses project. The project was developed by leading developer and leased to FedEx for 15 years. It is expected to generate an annual cash yield of 8% and a net IRR of 9% over an 18-month term.

The second project is in Germany and leased to a major logistics company. The property was sold in November 2021 and generated annual cash yield of 8.5% and a net IRR of 12.3% in a 6-month term. The Alternative Investments Department has successfully invested in a student housing project next to the University of Central Florida (UCF) in Orlando, USA. The project is expected to generate an annual cash yield of 8.5% and a net IRR of 9% in 42-month term.

Financial Advisory Services

Al-Mukhaizim said that the Financial Advisory Services (FASD) successfully listed Al Safat Investment Company, a full-fledged investment-licensed company with a capital of $85.2 million. It also supported a leading fitness and lifestyle business in securing debt, in addition to several deals, including a buy-side transaction for a leading logistics company, one of Kuwait's largest multi-sector businesses. It is also working on two flagship pre-IPO mandates, with expected completion in 2022 and 2023 as well as contracts to provide general advisory services. The FASD carried out several key mandates during 2021 including the sale of Al-Faysal Bakery in Q1 2021, the successful listing of Al-Safat Investment Co., which attracted strong investor demand and performed excellently post-listing.

The Department also helped acquire a stake in a leading regional food and beverage company, supported a health technology company to secure initial funding and helped a gym operator secure financing for growth. Al-Mukhaizim stressed that the FASD enjoys technical and qualitative knowledge in identifying, negotiating and seizing opportunities in the local and regional markets. The advisory team recorded an outstanding market performance in 2021.

Best Company Award

In recognition of its exceptional achievements and efforts in Investment Banking Sector (IBS), NIC was granted Best Investment Management Company in Kuwait award for the year 2021, by the International Business Awards, the leading magazine in the world of business and financial investment. Al-Mukhaizim said that the award is result of the great efforts NIC made and an international recognition of the Company's excellent and outstanding performance in the various investment services it provides in Kuwait. The award also highlighted the NIC`s aspirations and the growth it continues to achieve.

Al-Mukhaizim praised the performance of the IBS team in the management of Alternative Investments and FASD, saying that NIC worked and is still working with utmost accuracy and efficiency to meet the aspirations of its clients at the local, regional and global levels. The aim is to maintain NIC`s progress and its prestigious position as one of the most prominent specialized investment entities with a track record of achievements and successes in managing many operations and billions-worth of deals.

This gives NIC the advantage to manage more of those deals with merit. Al-Mukhaizim also praised the promising strategic plan and outlook of NIC, which is one of the largest investment companies in Kuwait and the region in terms of fiduciary AUM amounting to KD 1.13 billion as of September 30, 2021, as well as its management of M&A deals and several diversified investment services.