SAUDI ARABIA - Finance
CEO, ANB Capital
Khalid Alghamdi has been in the investment banking industry for more than two decades, starting at Merrill Lynch as a stockbroker. Subsequently, he joined Salisbury Associates as a corporate finance projects supervisor. From 2004 to 2016 he led GIB Capital’s investment banking effort in Riyadh. In January 2018, he joined Mizuho Saudi Arabia as managing director/executive board member. In September 2019 he joined Credit Suisse Saudi Arabia (CSSA) as CEO/executive board member.
ANB Capital is a wholly-owned subsidiary of anb, acting as its investment arm. Can you introduce ANB Capital to our readers, and its recent highlights and achievements?
ANB Capital, until recently known as ANB Invest, is one of the leading investment banks in Saudi Arabia with an equity base that exceeds SAR 1.5 billion. Our service offering covers investment banking, asset management, alternative investments including real estate advisory, real estate fund management and private equity, and brokerage in securities listed on the Saudi Stock Exchange as well as on international markets.
Today, we are particularly prominent in the real estate space where we have outpaced competition. In the past 12 months, we have launched 5 real estate funds, all structured in line with Shariah principles, bringing our total number of real estate funds to 8 and the value of real estate funds under management to just over SAR 10 billion. In November of 2021, we launched a SAR 1.1 billion fund developing a growth corridor along Thumamah Road in Riyadh. Subsequently, we launched 2 funds in 2022 that will focus on the development of infrastructure in Taif, which follow His Majesty King Salman’s inauguration of the Taif Development Commission indicating the government’s renewed focus on Taif region’s population and economy. We have also launched a fund valued at more than SAR 3.5 billion that will invest in an infrastructure development in the Dirab region of Riyadh, and a SAR 780 million fund that will develop raw land in north Jeddah, part of the urban transformations in Saudi Arabia envisioned under Vision 2030.
Going forward, while the real estate sector will continue to derive impetus from fundamental forces driving demand – such as population dynamics, the tourism sector and the growing economy – we also intend to diversify into private equity by bringing Saudi investors investment opportunities in growth stories in KSA as well as in US, Europe and East Asia. Saudi investors are savvy and keenly interested in opportunities across the globe as the world becomes a smaller place.
In Asset Management, we have put together an industry leading team that has already started yielding strong returns for us. Argaam’s July report on the Kingdom’s equity funds with more than SAR 100 Mn under management identified three of ANB Capital funds among the top six performers for the first half of 2022. ANB Capital IPO Fund (Shariah) took second place, ANB Capital Pure Saudi Equity Fund (Shariah) came in third, and ANB Capital Saudi Equity Fund came in sixth. Asset Management will continue to be a core area of focus for us, as we expand our bouquet of funds to include global, thematic and income generating funds.
This year has also been a banner year for our investment banking business which is now in the process of executing more than 10 capital market transactions. We have expanded our team and secured several mandates for mergers & acquisitions, initial public offerings (main market and parallel market) and debt capital market transactions. In 2021, we advised Saudi Aramco on a USD Sukuk issuance. Right now, we are advising three high profile Saudi companies on the sale of minority equity stakes to a large sovereign wealth fund, as well as a number of other companies on main market and parallel market IPOs. We are also assisting a number of companies with debt capital market issuances.
In the brokerage space, we increased our market share from 2.9% in the first half of 2021 to 3.3% for the second half of 2021, moving us from 11th place in the market to 8th place. Having said that, we are very aware of the changing nature of the market and the growing importance of institutional investors and QFIs. The increasing dominance of institutional investors is part of the natural evolution of all emerging markets, and we are now in the process of scaling up our service offering for institutional investors as we also grow in this space.
You became CEO of ANB Capital in May 2021. What is your vision for the company and what targets will characterize your operations?
Two key factors drive the success of an investment bank, which are people and technology.
Upon joining, I inherited a strong client base and infrastructure. We also have full support from anb, our parent bank, which has access to a client base comprising more than 2 million Saudi-based individuals and corporates. With such capabilities and strengths already in place, my mission is to continue to diversify our product offering while also identifying synergistic acquisition and investment opportunities that bring ANB Capital to the forefront of the Saudi capital markets.
Since 2019, ANB Capital’s revenue and net profit have grown at CAGRs of 17% and 68%, respectively, and we still have a long runway ahead of us. At this time, we are heavily investing in our team and in technology, and we are setting up new business lines. We have bolstered our Alternative Investments, Asset Management, Investment Banking and Brokerage Services teams with talent acquired from local and international markets, with a view to expanding our existing product portfolio and growing into areas that are new to us but where we know there is demand among investors.
Within 3 years, ANB Capital will be much stronger within its existing business lines while also contributing to the Saudi capital markets by introducing new offerings and services, and enhancing the capability set of the Saudi talent through, amongst other things, the transfer of knowledge from our international partners.
ANB Capital offers the full spectrum of investment services both conventional and Shariah-compliant, to all client categories including private & institutional investors. How has your portfolio of services been evolving over the recent years?
The continued evolution of the Saudi capital markets and the increasing awareness of local investors compels us to continue expanding our product offering. Within asset management, while we offer Saudi equity and fixed income funds, we also intend to bring a much more expansive suite of products to our clients including, as earlier indicated, global, thematic and income funds. Within the space of real estate, we are diversified across Saudi Arabia and we intend to grow internationally as well. In the brokerage space, we aim to add more markets and to significantly enhance the trading experience for our clients.
We are well aware that the institutional business has taken on much more significance in the last 12-18 months. Towards this end, we are in the process of setting up our research desk and scaling up the trading services offered to institutional clients. This is also firmly in line with my belief that in a people-oriented business, it is our resources who will drive our momentum forward.
Vision 2030 has identified the financial sector as one of the key development areas of the Saudi economy, and the increasing importance of Saudi Arabia as a global financial hub will create compelling opportunities for capital market institutions such as ourselves. With Riyadh gaining prominence as a financial center and the Saudi investor base keenly interested in innovative products and opportunities, our product offering will have to evolve to meet investor requirements. This is in turn will create a virtuous cycle which enhances local know-how and our ability to create Saudi-based financial solutions linked to a global marketplace.
In the past ANB Capital has been awarded as “the most customer focused brokerage house in MENA region”. What’s behind this success and how are you working to enhance the reputation of the company among the local and regional community?
Historically, the Saudi capital market has been dominated by retail traders. While institutional traders have begun to gather a larger share of Saudi brokerage volumes, the retail traders continue to be of overwhelming importance. Therefore, our operations and customer service functions are geared towards ensuring that our clients always have a superior trading experience.
We have recently introduced an upgraded trading experience which has been received very warmly by our clients. Having said that, we also realize that our clients are always looking for the next and better experience, which ties in with my statement that our business is also very much technology driven. Over the next year, we will continue to introduce new features to our platform to make trading in Saudi and international markets an easy and exciting experience for our clients.
What are your main priorities set in your 2022\23 agenda?
We are setting the foundation for growth over the next several years. We intend to grow our investment management offering significantly, with new funds planned to be launched at regular intervals up to the end of 2023. At the same time, we intend to maintain the momentum that we have built in the real estate space by continually bringing new funds to the market, introducing REITs, and overall contributing to the development of the real estate sector, elevating the quality of life for Saudi citizens in line with Vision 2030.
Our investment banking team is working on several high-profile M&A and public offering transactions, which are all expected to complete within the next 9 months. Greater emphasis has been placed on the private equity space and we will bring global tech opportunities and local investment opportunities to our investor base.
We will also be launching sell-side research capabilities which will provide insights into global and regional macroeconomics trends, publish reports on Saudi corporates and provide pre-IPO research on upcoming listings. Our focus on institutional clients will be further strengthened by the introduction of a dedicated sales trading desk.
We also have to stay at the forefront of technology developments. We will continually upgrade our technology platforms – targeted at institutional and retail clients – further enhancing market access for our clients.
SAUDI ARABIA - Industry
Governor, Saudi Standards, Metrology and Quality Organization (SASO)
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