2023 Nov 02
Abu Dhabi, 02 November 2023 – Waha Capital PJSC (“Waha Capital” or “the Company”), an Abu Dhabi-listed investment management company (ADX: WAHA), reported net profit of AED 407 million for the first nine months of 2023, a 57% year-on-year increase, as its public funds outperformed their respective benchmarks and attracted significant inward investment.
The company recorded total operating income of AED 679 million in the nine-month period, an increase of 54% from AED 441 million a year earlier. The solid income growth was driven by the strong performance of Waha Investment, a wholly-owned asset management subsidiary, as its emerging markets funds continued to deliver attractive returns and increase fee income.
For the third quarter, Waha Capital reported net profit of AED 89 million, compared to AED 160 million a year earlier. Quarterly operating income was AED 179 million, compared to AED 217 million in the third quarter of 2022, reflecting volatility in global credit and equity markets driven by heightened macroeconomic uncertainty.
Meanwhile, the company continued to prudently manage costs, with third-quarter operating expenses remaining steady year-on-year at AED 58 million. Finance costs increased in line with higher benchmark interest rates.
Waha Capital’s total assets under management stood at AED 9.8 billion as of 30 September 2023, compared to AED 6.5 billion a year earlier.
The flagship Waha MENA Equity Fund ranked within the top 10 of Global Investment Report’s list of the world’s top 50 hedge funds. It was the only hedge fund managed in the MENA region included on the list, the fifth consecutive year it has been featured.
Waha Investment, our capital markets business that actively manages emerging markets funds, recorded AED 619 million in net investment returns for the first nine months of 2023, an increase of 72% from a year earlier. Fee income from managing third-party capital almost doubled year-on-year to AED 69 million. The business reported a net profit of AED 585 million for the first nine months, compared to AED 307 million a year earlier.
Fee income has increased significantly, driven by new investments by regional and global institutional investors, amounting to approximately AED 2.8 billion in 2023. Total assets under management reached AED 8.1 billion as of 30 September 2023 compared to AED 4.8 billion as of 31 December 2022, an increase of 67%.
The Waha Emerging Markets Credit Fund, which pursues diverse long-short strategies in emerging markets fixed income, delivered a return of 4.3% for the first nine months of 2023, surpassing the reference JPMorgan EMBI Global Diversified Index’s total return of 1.8%. The fund has delivered a cumulative return of 190.6% since its inception in 2012, compared to 41.8% for the reference index.
The Waha Islamic Income Fund delivered a total return of 3.93% (gross of fees) versus a benchmark return of 0.95%. The fund, which invests in global sukuk and Shari’ah-compliant equities, has recorded a cumulative return of 19.6% (gross of fees) since its inception in August 2020, versus a negative 4.2% return by the reference Dow Jones Sukuk Index.
The Private Investments business recorded a net loss of AED 6 million in the first nine months of 2023 versus net profit of AED 25 million for the same period in 2022. This is predominantly due to fair value adjustments on its holding in National Energy Services Reunited (NESR) and certain assets in the Global Opportunities portfolio. However, the business demonstrated its resilience in Q3 2023, reporting net profit of AED 21 million versus AED 5 million in Q3 2022.
The business continues to prudently deploy capital through its Global Opportunities multi-asset investment strategy, which has a portfolio valued at AED 502 million as of 30 September 2023.
Waha Capital’s Core Portfolio of private investments, including the Waha Health platform, continues to evaluate opportunities to expand its assets, valued at AED 55 million as of 30 September 2023. Waha Health has made progress in implementing its growth strategy and was profitable in the first nine months of the year.
The Private Investments team continues to evaluate opportunities to maximise shareholder value by monetising mature assets in its Legacy Portfolio, which is valued at AED 367 million as of 30 September 2023.
Waha Land, a wholly owned subsidiary of Waha Capital that owns and operates a light industrial real estate development in Abu Dhabi, registered total revenue of AED 32 in the first nine months of the year compared to AED 37 million in the same period in 2022. The business, which has occupancy levels of 95% for its developed property, provides steady rental income streams while continuing to develop high-quality logistics real estate at the prime ALMARKAZ project.
Mohamed Hussain Al Nowais, Managing Director of Waha Capital: "Waha Capital performed strongly in the first nine months of 2023, reporting net profit of AED 407 million, an increase of 57% year-on-year. The company has achieved a return on average equity of 11% in 2023, despite the impact macroeconomic headwinds and heightened geopolitical risks have had on global markets.
Our capital markets funds continued to outperform their benchmarks by healthy margins, with the flagship MENA Equity Fund more than doubling the returns of its benchmark. Meanwhile, our asset management business’ exceptional track record has continued to attract major international institutional investors, with third-party commitments totalling US$800 million this year.
In addition, our Private Investments business remains robust, although recent market volatility has had some impact on specific assets within its portfolio. Furthermore, our wholly-owned real estate subsidiary, Waha Land, continues to deliver solid returns, with 95% of our light industrial property portfolio now leased.
Waha Capital’s balance sheet remains robust, putting us on a solid footing to weather a challenging global macroeconomic environment. Our focus remains on delivering attractive returns to our investors and maximising shareholder value."
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