How we invest
Al Amal investment’s investment strategy is proposed by management, approved by the Board, and ultimately by the Supreme Council for Economic Affairs and Investment (SCEAI).
In 2020, we introduced a more formal top-down portfolio asset allocation process to guide the medium and long-term evolution of the total Al Amal investment portfolio. Al Amal Investment Reference Portfolio is designed to meet the long-term return objectives, subject to risk and liquidity limits set by the Board. The Reference Portfolio is then used to develop annual and medium-term investment plans for each investment team. Al Amal investment is an active investor and the strategies employed by our investment teams act to leverage Al Amal investment’s competitive advantages.
Investment Strategy
Al Amal investment strategy is based on 5 core principles:
Al Amal investment is a long-term investor.
We take active investment decisions based on market views.
Our position towards portfolio companies is that of a financial investor.
Flexibility is one of our key strengths.
We are able to build strategic external partnerships to complement our in-house capabilities.
Investment Approach:
Loan Basis: Al Amal Investment invests on a loan basis, hereby providing funding to projects or companies in the form of loans. These loans could be used for various purposes such as expansion, working capital, or specific project financing. In return, the borrowing entity agrees to repay the loan amount along with interest over a predetermined period.
Private Equity: In this case, Al Amal Investment may buy shares or ownership positions in private companies, providing them with capital to grow, restructure, or enhance their operations. The private equity firm then typically aims to sell its ownership stake at a profit after a certain period.
Benefits of Acquiring Loans from Al Amal Investment:
Flexible Financing Options: Al Amal Investment may offer flexible loan terms, allowing businesses to tailor the financing to their specific needs. This flexibility can be crucial for companies with diverse funding requirements.
Risk Sharing: Unlike equity investments, where the investor becomes a partial owner of the business, loans involve a lender-borrower relationship. This means that the business retains full ownership, and Al Amal Investment shares in the risk without having a direct say in the company's management.
Confidentiality: Unlike public equity financing, private loans often involve a more confidential arrangement. This can be appealing to businesses that prefer to keep their financial matters private.
Interest Rates and Repayment Terms: Al Amal Investment provides competitive interest rates and favorable repayment terms. This can be advantageous for businesses, as it affects the cost of capital and the financial burden of repaying the loan.
Preservation of Ownership: By opting for loans rather than selling equity, businesses can preserve their ownership structure. This can be particularly important for entrepreneurs and existing shareholders who wish to retain control over their company.
Industry Expertise: Al Amal offers not only capital but also industry expertise. They may have professionals with experience in various sectors, providing valuable insights and guidance to the businesses they invest in.
It's important to note that the specific benefits may vary depending on the terms and conditions offered by Al Amal Investment and the nature of the projects or businesses seeking funding. For accurate and up-to-date information, it's recommended to contact Al Amal Investment directly or refer to their official documents and communications.
Our competitive advantages
As a long-term investor with no short-term liabilities, we invest for the long term, to create value for generations to come.
Our patient capital can be invested in less liquid private companies and assets, and investments that will need longer to mature.
Al Amal investment has certainty of capital. We are not subject to client redemptions and can make longer-term commitments and strategic investments in our internal capabilities and relationships.
Our investment teams have deep expertise to take advantage of market opportunities and complex situations. We are agile and flexible in how we structure and negotiate investments and can select the part of the capital structure with the best risk-adjusted returns. In addition, internal investing gives us a greater degree of control over how our funds are invested and managed.
Al Amal Investment has partner-like relationships with some of the world’s top investment managers. Externally managed funds are used to generate co-investment opportunities, particularly via private equity and real estate funds, and to complement our internal investments by creating exposure to non-core asset classes, such as hedge funds and venture capital.
While Al Amal investment is active, we are not activist towards our portfolio companies. We are purely financial investors and we work to nurture a partnership with management teams to generate long-term value. We also nurture partnerships with our co-investors, and where appropriate, may take a more active role.