KUWAIT - Finance
Ali H. Khalil has more than 33 years of experience spent between Kuwait, USA and France. Prior to that, he was Markaz’s Chief Operating Officer from 2010 to 2020, whereby he oversaw both the Asset Management and the Investment Banking activities. He joined the Markaz group in 1989 as the President of Mar-Gulf Management, the real estate arm of Markaz in USA. Under his tutelage, the real estate investments activity was expanded to include the MENA region with special focus on the GCC, and later on Europe. He holds an MBA degree from INSEAD in France, a M.Sc., and a B.Sc. in Industrial Engineering from Texas A&M University, USA.
Ali H. Khalil, CEO of Markaz, talks to TBY about investment banking, the pandemic era, and attracting foreign investment.
What makes Markaz so successful in the regional asset management and investment banking market?
Ali H. Khalil: Established in 1974, Markaz is one of the oldest financial institutions in Kuwait. What separates us from the pack, is that this financial institution has always been in the private sector with a consistent shareholding. We have never been bailed out by the government regardless of market conditions. We have also had one of the most consistent boards of directors throughout the years, despite the crises Kuwait has experienced over the years. We take great pride in being an independent organization, and be boast one of the longest track records in the market by far, across all of our activities. When potential customers come to us, they are shown the track record, which with real estate investments dates all the way back to the 1970s and they comprehend our reliability and consistency. Meanwhile, Markaz has been launching real estate funds internationally. We have one of the longest track records as an equity mutual fund in Kuwait, established in the late 1990s. Moreover, our organization relies heavily on research. The other factor in investment banking in Kuwait worth noting is that many companies in the market are tied to other conglomerates or have their own subsidiaries, which can create a conflict of interest. Markaz does not have this problem, because we are wholly independent. To summarize, we are consistent, reliable, research-driven, independent, and diligent in our work.
What has been the company’s experience of the pandemic and what lessons or improvements came out of it?
Ali H. Khalil: Our priority is the security and well being of our staff and their families. Second is to continue serving our clients, who need to know that even under the worst circumstances their money is safe. We had to ensure they feel confident and calm about their funds and in our ability to continue our service. We have adapted efficiently thanks to our Business Continuity Plans (BCP), which as imperfect as they can always be, were the foundation of our success. The lesson we have learned from Covid is that one should never underestimate the importance of a good BCP. Of course, there were new challenges we had to overcome quickly, such as the transition to working-from-home, but thanks to the diligence of our IT team, our staff was able to go home and start work first thing after the weekend of the lockdown, almost seamlessly. Another lesson was the potential of automation, which was a true savior for us. This shift in perspective made us invest and develop heavily in the IT component of our business post-Covid. We have also adopted a more open-minded attitude, treating our employees differently since the pandemic. Well-being became a bigger and more openly discussed topic. The culture of the workplace has definitely changed.
When it comes to foreign investment, a part of Kuwait’s vision 2035 is the idea of making Kuwait a financial hub of the MENA region. How is Markaz helping to attract foreign investment?
Ali H. Khalil: Over the past few years, Kuwait has had a substantial money inflow to the capital market. Thanks to our Capital Markets Authority, investments in Kuwait are becoming an appealing option for international investors. Then, we have Bursa Kuwait, which has not stopped its activity even during Covid, and has been a great platform for potential investors since its work is very consistent. The institution works around the clock and has improved many of its processes, making Kuwait’s market an attractive investment address. Moreover, personally I believe deeply in the work of the Kuwait Direct Investment Promotion Authority (KDIPA). They are very creative in their activities and open to change for the better. Since KDIPA’s changes to international companies’ requirements, Markaz has worked with multiple multi-nationals helping them get settled in the Kuwaiti market, obtaining their licenses. Moving forward, I think advancing privatization will attract more foreign companies. The government is willing to accept more and more foreign entities in Kuwait and that will make all the difference. And meanwhile, more privatization means more investment opportunities and available international expertise. It is a win-win. In the end Kuwait needs to be showcased to the world and KDIPA is definitely doing a great job on that front.
What will be Markaz’s impact on rising investment opportunities in Kuwait?
Ali H. Khalil: Markaz has always been one of the two companies first thought of by international companies arriving in Kuwait. We understand international markets very well and maintain our processes on par with international standards. For those who are coming to Kuwait to set up operations, we can help them with locations, banking services, equity, raising capital for their local operations, and with KDIPA licensing and so on. At the end of last year, we felt that the Kuwaiti market was changing. Since the 1990s, we have improved our regulatory framework considerably. Initially there was no regulation, a condition that was replaced with very strict regulation, with condition finally improved with the emergence of KDIPA in 2010. We have indeed come a long way. They have worked hard over the past decade to reorganize the market properly. Now, post-Covid, we are in a new era where Kuwait has attracted foreign investors and greatly transformed its market. It is a time of appetizing opportunities and major changes. I have experienced Kuwait’s growth since the early 1980s and have witnessed the rise of this transformation. It is an exciting and attractive time for both investors and the companies.
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