2024 Aug 01
Driven by an increase in fee income, strong inflows of third-party capital into Waha Investment and supported by the robust performance of the Private Investments business, Waha Capital’s net operating income increased by 6% to AED 529 million in the first half of 2024.
The company is finalising the refinancing of its existing US$ 500 million revolving credit facility, which will mature in mid-August 2024, as it prioritises prudent management of its balance sheet. This refinancing will ensure Waha Capital is well-positioned to invest in emerging growth opportunities over the coming years.
Further reflecting the company’s solid financial position, shareholders approved a dividend distribution of 10 fils per share, including a 1.5 fils per share special dividend for the 2023 financial year, which was paid out on April 25, 2024.
In the first half of the year, Waha Capital continued to earn accolades for its multi-year track record. In April, the company featured in Forbes Middle East’s Top 30 Asset Management Companies 2024 list. Meanwhile, the Waha MENA Equity Fund achieved the top ranking in the Global Investment Report and has now been ranked among the world’s top 50 hedge funds for five consecutive years. Waha Capital was also named “Investment Management Company of the Year - UAE 2024” at the Pan Finance Awards.
Waha Capital’s public markets business, operated by its wholly-owned asset management subsidiary Waha Investment, achieved a solid net profit of AED 135 million in the first half of 2024, marked by a significant increase in third-party capital inflows. The asset management business offers sophisticated investors active management of emerging markets’ credit and equities funds via a disciplined approach to investment and distinctive strategies that deliver market-leading returns.
In the first half of 2024, the business generated fee income of AED 101 million and a net influx of third-party capital that reached AED 691 million. By the end of the first half, total third-party assets under management were AED 6 billion, which surpassed 50% of total assets under management. This third-party capital is well-diversified across regional and global clients, including sovereign wealth funds, pension funds, insurance companies, private banks, family offices, and high-net-worth individuals.
Significantly outperforming its benchmark, the Waha Emerging Markets Credit Fund, which employs diverse long-short strategies in emerging markets fixed income, delivered net returns of 10.1% in the first half of 2024, compared to the JPMorgan EMBI Global Diversified Index’s 2.3% return. Since its inception in 2012, the fund has achieved a cumulative return of 235.6%, compared to 56.3% for the reference index.
The Waha MENA Equity Fund, which has delivered a cumulative net return of 356.4% since it began in 2014, surpassing the benchmark’s return of 68.3%, softened slightly in the first half due to heightened regional market volatility. Consequently, it experienced a 3.7% decline in the first half of 2024, compared to a 1.5% decline for its reference, the S&P Pan Arab Composite Index.
Meanwhile, the Waha Islamic Income Fund, which focuses on global sukuk and Shari’ah-compliant equities, posted a total return of 2.6% (gross of fees) in the first half of 2024, compared to a 0.6% increase for its reference, the Dow Jones Sukuk Index. Since its launch in 2020, the fund has recorded a cumulative return of 29.8% (gross of fees), outperforming the reference index’s 0.8% return.
The Private Investments business, which pursues a growth-focused multi-asset investment approach with the flexibility to deploy capital across diverse sectors and geographies, recorded a net profit of AED 141 million in the first half of 2024, against an AED 26 million loss in the same period last year. The strong performance was predominantly driven by mark-to-market gains across the portfolio.
The business also successfully divested its holding in Despegar at the beginning of the second quarter, securing a consideration of AED 221 million.
As of 30 June 2024, the Private Investments business is managing AED 820 million in assets. The Private Investments team continues to diligently assess a healthy deal pipeline while prioritizing optimal divestment options.
Waha Land, a wholly owned subsidiary of Waha Capital that owns and operates a light industrial real estate development in Abu Dhabi, recorded a net profit of AED 17 million in the first half of 2024, representing growth of 6% versus the same period last year.
Stages 1 and 2A of the ALMARKAZ project enjoy a 98% occupancy rate across 182,500 square meters of versatile industrial and logistics units. The latest stage of expansion, Stage 2B, was completed in Q1 2024, adding premium leasable space to the portfolio. Leasing activity for Stage 2B is progressing steadily, with current occupancy reaching approximately 20% of the completed 76,000 square meters.
Waha Land continues to explore various options for the ALMARKAZ project, including the potential monetization of completed assets. This strategic consideration comes at a time when the UAE’s increasingly diversified economy and growing intra-regional trade are driving demand for high-quality logistics facilities.
Waleed Al Mokarrab Al Muhairi, Chairman of Waha Capital: "Despite challenging global macroeconomic conditions, Waha Capital demonstrated robust financial performance in the first half of 2024, achieving a return on average equity of 13.1%. The Waha Investment business continued its strong track record by securing AED 691 million in new third-party capital, highlighting institutional investors' confidence in our flagship funds.
The Private Investments division has further strengthened the company's balance sheet through successful value realization across various assets. In addition, Waha Land continued to be a cornerstone of our strategy, driving growth and providing a steady rental yield.
With 27 years of experience shaping Abu Dhabi’s financial landscape, Waha Capital remains dedicated to attracting global capital and fostering sustainable growth to enhance shareholder value in the future."
Mohamed Hussain Al Nowais, Managing Director of Waha Capital: "Waha Capital’s first-half earnings demonstrate the strategic value and resilience of our diversified business model. Furthermore, our performance highlights our ability to deliver robust results through periods of global market volatility.
In the first six months of the year, the company recorded a 21% year-on-year increase in net profit attributable to shareholders, which reached AED 205 million. Key drivers contributing to our gains included increasing third-party capital commitments in our flagship funds and substantial mark-to-market gains in our Private Investments business. This further validates our multi-faceted capital allocation strategy and rigorous approach to risk management.
Each of our business pillars contributed strongly to our financial results. Waha Investment’s consistent performance continues to draw significant new third-party capital, now totalling AED 6 billion and representing more than 50% of its assets under management. The Private Investments business generates value across its diverse portfolio, while Waha Land provides a consistent stream of income. I am confident that the diversified strength of our three business pillars will continue to deliver sustainable returns to create long-term shareholder value."
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