SAUDI ARABIA - Finance
CEO, Saudi Fransi Capital
Saudi Fransi Capital is Chief Executive Officer and Board Member of Saudi Fransi Capital, the investment arm of Banque Saudi Fransi, with over 20 years of banking and financial services experience. He also serves as a member of the CMA’s Capital Market Institutions Committee as well as other internal Board committees such as the Executive Committee and the Compliance Committee. As Chief Executive Officer of Saudi Fransi Capital, Mr. Salam develops and maintains a range of effective relationships with all key Clients, Business Partners, Shareholder, and Regulator in order to acquire and sustain the support necessary to build the business and service over time. Before joining Saudi Fransi Capital, Salam most prominently served as Chief Executive Officer at Samba Capital where he was responsible for executing successfully high profile and complex mandates. This is in addition to the oversight of all Samba Capital’s key business and operating units.
Could you walk us through your achievements and milestones during 2021?
The key to our success and achievements stemmed from our ability to grow in our existing activities and venture out successfully into new initiatives as well. In investment banking, we completed three main market IPOs with recorded orderbook of SAR 103.4 billion, driven by our strong advisory, execution, and placement capabilities. SFC also advised on PIF’s acquisition of Emaar the Economic City by restructuring its capital through debt conversion, which was one of the largest debt conversions by a listed company in recent years at SAR 2.83 billion. We successfully executed a SAR 479 million Accelerated Book Building (ABB) transaction in the main market as a joint book runner. We also supported the Riyadh-based food delivery firm Jahez with their Nomu IPO as a joint bookrunner for the institutional tranche and as a receiving agent for the retail tranche. This was the first IPO of a technology start up on the Saudi Exchange. We were also active in the Debt Capital Markets (DCM) arena, advising Saudi Real Estate Refinance Company (SRC) for its SAR 10 billion sukuk program. In addition, we supported Saudi Aramco as a joint bookrunner in the offer of its 6 billion USD inaugural multi-tranche sukuk issuance. We continue to lead in M&A advisory capabilities with several merger and acquisition deals, such as the recently announced M&A transaction of SABB takaful. Reflecting the caliber of this work, we were named the “Best Investment Bank” in Saudi Arabia. In addition, we earned a recognition as Best Equity House and Best Investment Bank in Saudi Arabia. We were also awarded Best Sukuk Deal of the Year and best Public Sector Deal of The Year for SRC sukuk. Our asset management business registered another milestone: our maiden launch in the domestic infrastructure space in 2021. We successfully debuted our Saudi Data Center Fund 1, which has the ambition of developing and operating data centers across the country. We continued to grow our global advisory platform with several deals in US and European real estate. We were also extremely pleased to successfully exit 2 of our global real estate investments towards the end of 2021, recording high double-digit IRRs for our investors. Our success in real estate investment was demonstrated with a Best REIT Management Firm recognition for Bonyan REIT. In the securities brokerage business, we expanded our institutional sales trading product offering by focusing on niche services such as bulk liquidation and bulk purchasing. We delivered the first liquidity plan in the Saudi market for a new listing on NOMU. Following these accomplishments, we reported an increase in net income of 68%, the largest increase among all bank-affiliated investment banks and capital market institutions.
What are your domestic and international expansion plans and ambitions?
We believe that Vision 2030 offers several exciting opportunities for all investors. As stewards and facilitators of capital, SFC is constantly looking to tap into various initiatives that will provide the most optimal solutions to support and accelerate the goals of economic transformation and diversification. Whilst our first initiative in this regard was in digital infrastructure, we are actively looking at opportunities in tourism and hospitality, as well as education and healthcare. We will also continue our expansion of the international client base that adds new liquidity to the capital markets in Saudi Arabia. By expanding our research to pre-IPO listing, we will help to provide more color on new listings to the Saudi capital markets, facilitating easier participation for institutional investors to the Saudi equity market. We are launching a VC fund with three main initiatives: fintech, open banking, and buy now and pay later. This will be a SAR 150 million VC fund focusing on the Saudi market.
What plans and projects have you established to support economic diversification in KSA?
We work on many initiatives, identifying several sectors, such as technology and real estate. We have two funds in the technology sector, and a third is underway. We also focus on real estate projects linked to KSA’s giga-projects as part of Vision 2030. These are mostly focused on infrastructure and real estate. Accordingly, we are financing solutions, along with partners, to address the challenges of those giga-projects.
Why is KSA an important market, and what sectors or industries would you highlight to international investors?
The Kingdom is going through an unprecedented transformation at a historically unrivalled pace and ambition. Most importantly, under the guidance and leadership of His Majesty, King Salman, and His Royal Highness, Crown Prince Mohammad bin Salman, we have seen more than ample evidence in the last few years of not only their unwavering commitment to transformation but tangible and extremely positive results as well. Not only does the Kingdom provide a plethora of diverse and lucrative investment opportunities but also the comfort of strong and committed leadership that will strive to ensure its vision and ambitions become reality. In terms of the sectors and opportunities, the Kingdom has done an excellent job, through all the ministries and authorities, of educating both investors and the public at large on its direction, projects, and initiatives in a clear and transparent manner. The tourism & hospitality sector offers incredible potential, especially as the Kingdom has a treasure of diversified natural sites that are currently being developed and harnessed. The mining and industrial sectors are set to continue growing strongly. The Kingdom has a robust infrastructure and regulatory environment to facilitate foreign investment in these sectors. The digital transformation program is also an exciting space and will continue to offer significant potential.
What are Saudi Fransi Capital’s goals and priorities for the next 12 months?
As with every year, we strive to deliver first and foremost on our investment performance targets for our investors and 2022 will be no different. In terms of projects and initiatives, our main priorities for 2022 include: the successful execution of our data center strategy as we move into the construction and development phase of the project; the launch of at least 1 development initiative in the tourism & hospitality space; continued expansion of our two listed REITs; the ambition to launch a domestic and regional venture capital program, and the launch of a Islamic fixed income strategy. For the investment banking business, the team is continuing to lead several high-profile M&A, IPO, and DCM deals and we have expanded our team and capabilities to offer other value-added services to our clients. As part of our digital transformation, we are revamping and significantly enhancing our online platform which we hope to launch this year and will continually enhance over time. The implementation of our new platform will facilitate easier access to capital markets through an omnichannel product offering. Also, the adoption of Saudi Exchange’ new initiatives relating to post trade enhancements could potentially be a catalyst for new product offerings or enhancement of delivering existing products.
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