Global Financial Market Review

Bahrain-based Shari’ah compliant alternative investment firm Arcapita grew its net income by approximately 50 percent year-on-year in the 2018 fiscal year to over $12 million, according to CEO Atif Ahmed Abdulmalik.

In an interview with Arabian Business, Abdulmalik said that during the 2018 fiscal year, the firm sourced four transactions with a total value of approximately $400 million.

“Fundraising activity in the Gulf remained strong at $230 million as we significantly grew our investor network through developing new relationships with prominent high net worth clients, family offices and institutional investors,” he said.

Looking to the future, he added that Arcapita recently completed a $100 million equity-fund raising round to accelerate its investment activity and to help establish a presence in new markets.

“Over the short and medium term, our main focus will be to expand our real estate portfolio in the US and regionally, and to continue to drive growth across our portfolio companies to execute on our growth plan and generate attractive returns for our stakeholders,” he said.

While Abdulmalik said that Arcapita expects the global economy to perform well in 2019 and grow by between 3 and 4 percent, he also noted that investors may turn your attention to less traditional markets.

“Strong job and consumption growth across the US and other advanced economies should fuel economic and investment activity,” he said.

“However, increased trade protectionism, tightening fiscal policies and political tensions might impact investors’ appetite for traditional markets such as the US and UK, and investors might seek opportunities in less favoured markets such as Southeast Asia and Eastern Europe.”

According to Arcapita, the firm expects to close an additional 3 to 4 transactions in 2019, with a total transaction value of between $300 and $400 million.

At the moment, Abdulmalik added, the firm is focused on responding to a number of macro trends that it believes will provide significant investment opportunities going forward, among them increasing health awareness, a digitising economy, and changing demographics.

“The global senior population is expected to double within the next three decades. In the US, the senior population is the country’s fastest growing demographic and by 2056 this age group is expected to be larger than those under the age of 18,” he said.

Abdulmalik added that, coupled with an ageing population, the proportion of Muslims globally continues to grow, with Muslims expected to account for a third of the world’s population by 2050.

“This is generating demand for Shari’ah compliant goods and services and has led to a rapid growth within the Islamic economy,” he said.