By MENA Fund Review
Qatar-based asset manager QInvest is optimistic and growing despite instability caused by the global financial crisis and the Arab Spring. MENA Fund Review spoke to Anuj Khanna, Head of Investments, about the firm’s philosophy and outlook.
While much of the asset management industry looks on the current world and specifically MENA region economic situation with a degree of doom, Qatar based investment house QInvest is upbeat about investment prospects over the medium term.
The firm, which launched in 2007, with $750 million in shareholder capital continues to build out its platform and capabilities, deploying capital in a number of transactions and launching a range of Shariah-compliant products for clients over the past 12 months. The company has recently expanded its operations by establishing a presence in Turkey and Saudi Arabia.
The company works across a variety of asset classes including credit, private equity, public equity, real estate and structured products and is looking to expand into hedge funds.
QInvest’s approach is to seed its investment products, and then take them to its investor clients in the region. This “demonstrates our commitment and ensures an alignment of interest with our clients” says Anuj Khanna, head of investment management.
The worst of the instability in the region appears to be past us and investment activity has picked up across many of our focus markets, he says. As the region returns to relative stability, risk taking will come back to the marketplace. “The dislocation stemming from events in the past six months led to volatility and a mispricing of risk in the region. Such situations, if played correctly can represent attractive opportunities for those committed to the region”, he says.
“Being a regional firm, people are aware of our long term commitment to the marketplace and that puts us in a good position to engage with counterparties on opportunities.”
This understanding of the MENA region’s dynamics has allowed QInvest to move in quickly where valuations are attractive relative to the underlying risk. Investors that wait for complete stability will likely miss these opportunities, according to Khanna.
“You have to look at opportunities now, and factor the risks in your pricing decisions” he says. “If you wait for a complete resolution to the crisis you will probably be a little late to the party.”
While QInvest sees opportunity, it is also very aware of the risks, according to Khanna. Investing across a wide range of asset classes, the company keeps a close eye on global issues that could affect its investments. Geopolitical risks remain a concern, and underlying business risks have been heightened by events in the region. Macro risks are also elevated as a result of the global financial crisis and the continued challenges in Europe and the US. The recent financial crisis has shown the MENA region’s interdependency with global markets.
QInvest currently has a team of 150 people based in Qatar, looking at investment opportunities both across the MENA region and globally. The firm looks to add value by its understanding of MENA markets, by investing in businesses in the region that are keen expanding their operations beyond their core markets.
Opportunities like these will continue to present themselves, according to Khanna, as the region emerges from the current instability and underlying economic drivers and entrepreneurial risk taking re-emerges.
“There appears to be greater awareness towards creating shared prosperity in the region through partnerships and risk-sharing” he says. “That will create opportunities.”
Longer term, the regional outlook remains strong given the rich resource base and prospects of the MENA region as an attractive market for multinationals given the demographics. This will lead to a rising level of intra-regional trade and capital flows.
The asset management firms to benefit from this will be those with the foresight to invest ahead of the crowd, and this is the essence of QInvest’s strategy.