Non-traditional sectors and special situations need pioneering approaches to investing, says SHUAA CEO

Jassim Alseddiqi, Group Chief Executive Officer of SHUAA Capital psc (DFM: SHUAA), explains how SHUAA Capital is making the UAE proud by backing growth businesses, turnaround special situations and start-ups through its differentiated investment approach and turnaround strategies, ultimately enabling these entities to scale their growth regionally and globally.

Under Alseddiqi’s guidance, UAE-based asset management and investment banking firm, SHUAA has become one of the most active financial institutions in the Middle East – transforming regional businesses for local and global success while delivering significant value for all stakeholders.

During 2021 alone, SHUAA led or invested in transactions in excess of USD 500 million in value. Among the firm’s most novel transactions this year was leading the region’s first-ever venture debt investment structured as a USD 50 million sukuk for UAE-based sustainable agriculture technology company Pure Harvest Smart Farms, which attracted cornerstone investment from Franklin Templeton among others. The highly complex structured financing solution also marked the first time in the region that an early-stage company was able to secure venture debt funding from capital markets, drawing attention to SHUAA’s unique capabilities in structuring financing solutions that meet both business objectives and growing investor demand for Islamic investments and ESG products.

SHUAA also made a further technology investment in SkyCell’s recently closed CHF 32 million (USD 34.8 million) Series C funding round. SkyCell is a Swiss pharma tech supply chain company that manufactures smart containers that enable the safe and sustainable transport of pharmaceutical products such as BioNTech Covid-19 vaccines that require frozen transportation.

Jassim Alseddiqi explains, “We are constantly focused on innovative investment approaches that will help us diversify and add new revenue streams, grow recurring revenue and ultimately scale to deliver superior long-term financial performance.”

The company delivered strong earnings growth in Q3 2021 with net income attributable to shareholders up 19% over the previous quarter, Alseddiqi added, “The company’s recent performance demonstrates the resilience and strength of SHUAA’s diversified platform and the consistent execution of its growth strategy”.

One of the key highlights this year was SHUAA’s financial advisory and arranging role and investment in Abu Dhabi-headquartered music streaming platform Anghami, which saw Anghami combine with Vistas Media Acquisition Company Inc. (VMAC), a listed Special Purpose Acquisition Company (SPAC), leading to the highly anticipated listing of the music streaming platform on the Nasdaq exchange in New York.

The transaction will result in Anghami being the first Arab technology company to list on Nasdaq New York. SHUAA has already secured commitments of a combined USD 40 million in private investment in public equity (PIPE), with SHUAA also leading a funding round for Anghami via a convertible note earlier this year.

When Anghami entered into a business combination agreement with VMAC earlier this year, SPACs were still a relatively unknown concept in the Middle East region. However, SHUAA has recognised the huge potential of SPACs and is looking to set up three blank check companies in the coming months – a move that could rapidly open up the booming SPAC market to Gulf investors and companies seeking capital beyond traditional avenues.

Alseddiqi also says he believes investments, particularly in the tech space, need unconventional thinking:

“This is a new era we are living in now, that has been further dramatically disrupted by the pandemic. Over the past 18 months, technology has completely eclipsed so many of our conventional ways – and this is only the start. It begs the question on why are we meant to stick to conventional financing solutions? If there was ever a time to pioneer approaches to investing and value creation through a differentiated, innovative and globally viable product offering, it’s right now.”

Over the years, SHUAA’s investments and contributions have helped create value not only for its shareholders but also for the UAE as a whole by attracting investments from global players. SHUAA is also among the handful of non-government-related entities (GREs) investing in the region, driving economic development and supporting budgets for priority projects in a period of relative fiscal austerity following the pandemic outbreak, and weakened oil revenues. Earlier this year, SHUAA rescued Stanford Marine Group (SMG), by completing an AED 1.13 billion (USD 308 million) debt buyout, saving 1,800 jobs and millions worth of (Made in UAE) vessel exports annually. The restructuring programme gave the company a new lease of life with increasing profitability and a solid order book for its subsidiary, Grandweld Shipyard.

“As always, our transactions are designed not only to enhance shareholder value, but also to meet the specific needs of the companies in which we invest and to help deliver the most effective business benefits while fuelling economic growth. We also take a long-term view of the sectors we invest in – deploying a thoughtful value creation agenda, thoroughly studying a company before investing, then engaging in effective dialogue and collaboration with management to achieve positive change,” says Alseddiqi.

With technology a key focus for SHUAA’s growth, the company plans to double down on developing its digital products offerings including the launch of a digital wealth management platform. The new AI-integrated platform aims to elevate the traditional wealth management and advisory experience, opening up SHUAA’s market leading proposition to a broader investor base of next generation of investors.

The most compelling new technologies are designed for the future, not today; the same goes for investments,” Alseddiqi concludes.