Bahrain’s Mumtalakat prizes local investment over global

Hamad I Mohammed/Reuters

• ‘Highest return’ at home
• $18bn assets under management
• Gateway Gulf forum

Bahrain’s multi-billion dollar sovereign wealth fund Mumtalakat is looking closer to home for investments, prioritising local over international opportunities.

Shaikh Salman bin Khalifa Al Khalifa, minister of finance and national economy at Mumtalakat, said: “What we have found is the most compelling investment opportunities, the highest return on equity investments, are increasingly at home or in the region.”

Mumtalakat was founded in 2006 and, with roughly $18 billion worth of assets under management, is one of the Gulf region’s smaller sovereign wealth funds compared to the $930 billion-plus in assets held by neighbouring Saudi Arabia.

The Bahrain fund looks at private investments to help the kingdom in its efforts to diversify. It holds stakes in more than 60 local and international commercial companies in 13 different countries.

International interests include Italian Racing Force, the parent company of motorsport safety product manufacturer Racing Force Group. In May it was announced that the fund was investing in Singapore Gulf Bank. It has also committed to exploring investment opportunities in China.

In Bahrain Mumtalakat holds stakes in some of the largest local companies, including National Bank of Bahrain, Gulf Hotels Group, Bahrain Telecommunications Company (Beyon) and Aluminium Bahrain (Alba).

Last month, it was announced that Abu Dhabi-backed CYVN Holdings had entered into a non-binding agreement with Mumtalakat Holding to buy a stake in British carmaker McLaren Group, with the potential to take ownership of its automotive business.

“Mumtalakat has, in effect, turned itself into the joint venture partner of choice for inward investment because of the fact that it provides us with the highest returns,” Al Khalifa said during a panel discussion on the opening day of the Gateway Gulf investment forum in Bahrain.

Since the inaugural Gateway Gulf event was held in 2018 Bahrain has attracted more than $15.6 billion in foreign direct investment, including a record $6.8 billion last year, Al Khalifa said.

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The International Monetary Fund estimates that Bahrain requires oil prices of $125.7 per barrel to achieve budgetary equilibrium. Non-oil activity makes up 85 percent of the country’s gross domestic product.

Mumtalakat’s focus on the region mirrors the announcement by Saudi Arabia’s Public Investment Fund (PIF) which was made during the Future Investment Forum in Riyadh last week.

PIF’s governor Yasir Al-Rumayyan said the plans were to reduce foreign investments to about a fifth of its total assets under management.

Speaking during a panel session in Bahrain on Sunday Saudi Arabia’s minister of investment Khalid A Al-Falih said: “We’re finding opportunities around the world and we’re not stopping investing globally, but we’re finding, more often than not, that the best investment opportunities are here in the Gulf.

“We should not look beyond our own nose and just think globally when we have such competitive, profitable opportunities here for ourselves and with global investors.”