Following the announcement, Argaam conducted an interview with the managing director and CEO of AlKhair Capital, Khalid Al-Mulhim.
Excerpts from the interview:
Q: What are the main objectives behind raising the firm’s capital to SAR 1 billion?
A: Before we begin, I would like to point out that AlKhair Capital was licensed by the CMA in 2009. Therefore, this year we celebrate the 10-year anniversary since establishment and licensing. During these years of working in the Saudi market, we have managed to achieve many goals for our investors, especially that we have extensive experience in the field of asset management, financial advisory services at both regional and international levels.
AlKhair Capital is also active in structuring and managing Shariah compliant investment funds, and also offers brokerage services to those interested in trading. Therefore, the shareholders of the company have great confidence in the expected growth of the financial sector in Saudi Arabia, and see multiple opportunities for its expansion, especially after the significant development in the rules and regulations related to the financial market.
The new capital of the company will be invested to achieve the best returns for the shareholders and will be distributed on several products, mainly to support our Margin Trading product and to expand in the field of underwriting and management of IPOs, in addition to the establishment of strategic funds in several sectors, especially the healthcare and education.
We are also in the process of upgrading our current trading platform of the brokerage department to become more suitable to the requirements of our clients. We will also focus on the development of the internal systems of the company, study our geographical expansion plans, and attract the distinctive talents of this nation.
Q: What is the relationship between AlKhair Capital Saudi Arabia and AlKhair Capital Dubai?
A: It is a strategic relationship in which AlKhair Capital was the first Saudi investment firm registered and licensed by the CMA and the Dubai Financial Services Authority (DFSA) to operate in DIFC. This has greatly added to the two companies in terms of cooperation.
AlKhair Capital Dubai has achieved a great deal of excellence in arranging sukuk and has many private equity opportunities that are being evaluated and presented to investors. We also expect AlKhair Capital Dubai to launch several sukuk and private equity funds.
Q: What are your expectations for the returns of the funds of AlKhair Capital? What sectors are you targeting?
A: AlKhair Capital is on the verge of a major shift in asset management and a new strategy has been developed in terms of funds and portfolios management, in addition to attracting outstanding competencies in this field.
Currently, AlKhair Capital has approximately SAR 10 billion under management in several investments, mainly private portfolios and private funds in the healthcare, food and education sector in the Kingdom. It targeted companies characterized by a stable financial position, expected growth in the coming years and the simplicity of its exit process, especially since they operate in vital sectors which are targeted by most investors.
Therefore, these funds are expected to generate high returns when exiting, in addition to the current returns generated by these funds “at the rate of at least 7.5 percent annually.” Three private funds are currently being established in the indirect financing, healthcare and food sector.
Q: How do you evaluate the attractiveness of the Saudi market after implementing its entry into the FTSE and MSCI?
A: There is no doubt that the entry of foreign investors will add more value to the Saudi financial market in terms of liquidity. Although our market does not lack liquidity and the financial position is at the highest levels on a regional scale, but the other benefits are the fair valuation of stock prices associated with indicators, increase the level of transparency, and enhance the investors’ role in the market, mainly through research.
Q: What is your view of the Saudi debt market after the circulation of government issues and reducing the nominal value of sukuk to SAR 1,000?
A: We expect a huge growth in the Kingdom's debt market over the next few years. The government has established the Debt Management Office (DMO) in 2015 to ensure the Kingdom's access to various international markets with fair pricing.
It has achieved its objectives in the years following its establishment, and now the nominal value of the sukuk is reduced to SAR 1,000. This indicates that the development of the local debt market is continued which will lead to diversification of the investor base, and will increase the liquidity of the market.