Transcript AFS Presentation - Adaa Financial Services

Adaa Financial Services
Presentation Plan
adaa Financial Services Ltd
UAE – Dubai – DIFC
Al Fattan Currency House Office 706
Tel: +971 4 37 81 600 Fax: +971 43 85
9002
Table of Contents
• Executive Summary
• Who we are
• What makes AFS stand out
• Key Investment Terms
Executive Summary
• AFS is a wealth management company to operate out of DIFC under
DFSA regulation
• AFS has set up key partnerships with leading financial institutions
primarily in MENA and APAC allowing localised real time knowledge
on investment opportunities
• Through its partnerships AFS can advise and act on all asset classes
across the board in all geographies
• On top of all asset classes, AFS has the knowledge and experience to
engage in VC and PE style investments diversifying away from
standard assets
• Its client centric approach offers detailed planning based on a
sophisticated risk and tenure profiling mechanism yielding advanced
portfolio allocations
Table of Contents
• Executive Summary
• Who we are
• What makes AFS stand out
• Key Investment Terms
Who we are –The Structure
Internal Audit
(PKF Partnership)
External Audit
)Ernst & Young)
AFS Board of Directors
Chairman: Bard Al Harbi
Nikolaos Fotilas
Nikolas Fotilas
Senior Executive Officer
Bibigul Doszhanova
Risk Officer
Salah Sammarraie
Finance Officer
Company Secretary & IT Support
adaa Consulting Services
Walid Al Barazi
Relationship Manager
Mathew Wheatley
PART TIME
Senior Relationship
Manager
TBC
Assistant Relationship
Manager
Basel Hamawie
Business Development
Manager
Aaliyah Remtolla
Compliance/MLRO
Officer
Who we are –The Investment Team for you
•
Nikolas Fotilas, AFS CEO has over 14 years experience in financial institutions
and investment strategies. He has worked in Investment Banking in London in
Citi and Smith Barney, in Paris in EADS, in Prudential Asset Management and
Insurance in Hong Kong and served as Head of M&A and International at AlRajhi Bank in KSA, Kuwait and Jordan. Nikolas holds a BSc Economics from LSE
and an MBA from Insead / Wharton
•
Mathew Wheatley, AFS Senior Relationship Manager and Strategic Advisor has
been with UBS Wealth Management since 2006 leading strategy and
innovation through his role as COO Strategy and Innovation Director, following
the strategy and Business Development Director role. Mathew is also a visiting
professor at Regents Business School in London.
•
Walid Al-Barazi, AFS Relationship Manager, has been a Fund Manager at 3I
Capital Group in Dubai managing IPOs in Emerging Markets with impressive
allocations and returns track-record. Before 3I, Walid has been a Relationship
Officer at Dubai Islamic Bank. He holds a Bachelor of Business Administration
with concentration in Finance
Table of Contents
• Executive Summary
• Who we are
• What makes AFS stand out
• Key Investment Terms
What makes AFS stand out – Tailored
investment advisory services
• Tailor-made customer centric approach
- One-to-one investment consultations to understand your
investment objectives
- Expert advice and ongoing support
• Unique AFS client onboarding with sophisticated risk/tenure
profiling analysis and ongoing monitoring and tailor made advisory
• Investment Planning – Truly Local Market Access, not global
centralized approach
The AFS Way – Really helping you
Formal procedure to understand specific client needs
Human Life Cycle – Disciplined Planning
Income
Phase I
•
Phase II
Phase III
Having financial
Goal is primary to
starting an
Investment Plan
Child’s Marriage
Child’s
Education
Housing
Child birth
Marriage
22 yrs
Birth & Education
38 yrs
22 yrs Earning Years
Over 25 – 30 yrs
60 yrs
Retirement Age
• We first highlight our human life cycle in relation to the liabilities and
investments
•
Source: www.investor.sebi.gov.in
Lifestyle Investment Guide
Late 30s to early 40s
Mid 20s
20%
10%
5%
Stocks
Cash
30%
10%
5%
65%
Real Estate
Bonds
Stocks
Cash
55%
Real Estate
Bonds
Late 60s & beyond
Mid 50s
25%
38%
Stocks
44%
13%
5%
Cash
Real Estate
50%
10%
15%
Bonds
Stocks
Cash
Real Estate
Bonds
• We help you visualize your investment appetite vs your risk tolerance at a specific age
• We also take care of the tactical asset allocation for you given market changing conditions
What makes AFS stand out – Being Local
and Fast
MENA
APAC
Local
investment
opportunities
• Major Private Banks Issue weekly and monthly reports that
share globally and RMs try to advise based on these
centralized research
What matters
is time,
flexibility and
localization
• AFS has set up partnerships with key financial institutions
like Bank Of Singapore, Emirates NBD and others
• Our Investment Committee liaises directly with the
investment advisors locally in Asia and MENA
• This allows AFS to have real time and the best knowledge
and weight between advise from different localized
entities, getting the best of all words for its customers
What makes AFS stand out – Asset Classes
• AFS has access to all asset classes and proposes the best alternatives on
tailor made approaches
• Based on the customer centric approach we are getting the best in
terms of global portfolio allocation for our clients through our advanced
portfolio management
• Portfolio Theory Diversification – Based on the overall portfolio
allocation of the clients, AFS advises the best asset allocation on the
overall assets, not only the AFS allocated
Full portfolio
diversification
based on
advanced
portfolio theory
•
MENA and APAC stocks & ETFs
•
Fixed Income MENA, USA and APAC
•
Fixed Income Funds, Global
•
PE opportunities
•
VC opportunities
•
Alternative Assets
What makes AFS stand out – Full Asset
Allocation and Diversification Examples
•AFS based on the risk profiling and advanced customer onboarding analysis,
proposed different approaches and strategies…
§ Products with a Moody’s rating
Aaa-A3
§ Blue chip equities (US,EU, GCC,
Singapore)
§ Fixed
income
T-bills
(and
equivalent) with an average
yield-to-mature of 2-4% and
investment horizon of 5yrs +
§ Short dated bonds
§ Floating rate funds (expecting a
rise in interest rates)
§ Capital guarantee products or
structured products
§ Products with a Moody’s rating
Baa1-B3
§ Developed market exposure
§ Some direct equities on mid-tohigh growth sectors (US, EU,
GCC, Korea, Taiwan)
§ Structured notes
§ Exchange traded funds
§ Initial
public
offering
(IPO)
participation
§ Funds
§ Fund of funds
§ Hedge Funds
§ FX
basic
placements
with
hedging
§ Real estate investments
§ Sukuk
§ Sharia compliant funds
§ Partial
capital
guarantee
products
§ Products with a Moody’s Rating
Caa1-C
§ Private equity direct placements
§ Venture capital placements
§ Some direct stock trading on high
growth sectors (US, EU, GCC,
Korea, Taiwan)
§ Some direct equities on mid-high
growth sectors (US, EU, GCC,
Korea, Taiwan, SA)
§ Structured products
§ Derivatives
§ FX products and derivatives
§ Volatility
based
structured
products
§ Exotics
Diversification - Investment Products
• AFS offer:
Our experienced team will help the client in the portfolio construction process
proposing different types of investments and options such as Arranging Credit,
Real Estate, VC and PE investments, Alternative Investments, Islamic Finance,
Structured Funds, Fund of Funds, Vanilla products, Commodities, Futures,
Options and Exotics.
Maximize Returns, Minimize Risks
Small Cap equities will
have higher risk and higher
return potential
Returns %
Mid-Cap Equities
Blue Chips (Large Chips)
Equities
Investment-grade
Corporate Bonds
Money Market or Govt.
Treasuries will have lower
risk and lower returns
Risk % (Standard Deviation)
• Chart to help understand the return and risk relative to each asset class
What makes AFS stand out – Client Expectations
• In the last years the MENA region investors have seen phenomenal
growth both in the real estate sector and the local financial markets
• With declining oil prices, stagnating real estate prices, low interest
rates and slower financial stock price increases, these abnormal
returns are not part of the expectations of AFS
• Going the extra mile, AFS is engaging in VC/PE style approach that is
still at its infant stage in the MENA region
• Startup and PE infrastructure is improving daily. There are very few
successful funds in the region, while there are a lot of great startups
and Corporates that can be fast turned around with small financial
and managerial intervention yielding exceptional results upon exit
What makes AFS stand out – Alternative
Investments
Innovative
Approaches
• Direct VC/PE placements
• In a typical VC portfolio, most of the
returns are from 20% of the
investments
-
Statistically, if a VC makes ten investment,
two will be winners and create most of the
gains in the fund
• A minimum 'respectable' return for a
VC fund is 20% per year
-
set by the expectations of the investors in
VC funds, relative risk levels compared to
other investment classes and performance
achieved by other venture capital fund
managers
Asset Class
Target IRR
Infrastructure
10-20%
Real estate
12-20%
Private Equity
Buyout
15-25%
Venture Capital
25-35%
Big winners for VC firms will return
up to 100% IRR balancing the overall
portfolio performance to ~30% IRR
What makes AFS stand out – What we do for you
•
•
•
•
•
•
Discover historical trends
Perform financial analysis
Compare with the peer group
Obtain relevant economic news
Forecast future performance
View recommendations of the experts
PE funds under management in the Middle East have
shown a steady increase
•
Funds under management in Middle East amounted to $24.3bn in 2013
•
Investors are also increasingly deploying funds on a deal-by-deal basis instead of
launching specific funds (Deal-by –deal deployment not captured in the dataset)
Source: Zawya Private Equity Monitor
Low correlation of private equity returns with other
asset classes reduces systematic risk for investors
Correlation of Private Equity with Other Asset Classes
Equity Markets (%)
Bonds (%)
Long Term
Short Term
Long Term
Short Term
Annual1
0.57 to 0.59
0.49 to 0.58
-0.19 to 0.12
-0.37 to 0.07
Quarterly2
0.58 to 0.59
0.58 to 0.61
0.00 to -0.11
-0.22 to 0.03
Source: National Venture Capital Association
1
Diversification provided by PE/VC can offer a
superior risk/reward profile to investors
1
Assets
Sample Allocations in %
Large stocks
40.0
40.0
40.0
40.0
35
30
30
40.0
Small Stocks
10.0
10.0
10.0
10.0
10.0
10.0
10.0
10.0
Govt. Bonds
20.0
17.5
15.0
12.5
15.0
15.0
12.5
10.0
Cash
10.0
10.0
10.0
10.0
10.0
10.0
10.0
10.0
PE/VC
0
5.0
10.01
5.0
15.0
20.0
25.0
20.0
Mean Return
12.5
13.8
15.0
16.3
16.0
17.0
18.3
17.6
St. Dev.
10.9
11.7
12.8
14.0
13.6
14.5
16.0
15.5
Sharpe Ratio
0.995
1.035
1.048
1.043
1.058
1.056
1.036
1.029
Source: Gompers & Lerner, Private Equity and Asset Allocation: Clues to a Puzzle, Harvard Business School
Top investments by Private Equity in AMEA region
•
Average investment size of transaction in 2013 has been ~$15m
•
The region has seen an increase in growth capital VC and SME investments,
which are generally lower value, minority interest investments
Source: MENA Private Equity Association, 2014
Top investments by Private Equity in AMEA region
•
During 2013, a number of MENA-based companies listed on the foreign stock exchange markets,
including Al Noor Hospital (Ithmar Capital) and Gulf Marine Services (Gulf Capital) on the London Stock
Exchange and Sotipapier (Swicorp) on the Tunis Stock Exchange
Source: MENA Private Equity Association, 2014
Investment in start-up business by VCs is rapidly
gaining ground in the Middle East
•
Dubai has seen an impressive increase in
launches of accelerators, incubators and
co-working spaces
-
Google opening up “Google for
Entrepreneurs” Tech Hub in the UAE
• Start-ups in the region have begun raising
funds from abroad
-
Cairo-based, ElWafeyat.com received
$100,000 in seed funding from U.S.-based
500 Start-ups
-
Instabeat, a startup based in Beirut raised
$2m from angel investors and venture
capitalists
Venture Capital presence is the Middle East is
strengthening due to investments that foster
innovations and influx of foreign expertise
Source: The Wall Street Journal; Wamda Research Lab
What makes AFS stand out – Alternative
Investments
Renewables
Sectorial
choices with
growth areas
Industries catering to elderly population
Table of Contents
• Executive Summary
• Who we are
• What makes AFS stand out
• Key Investment Terms
Key Investment Terms
Fund Size
Open-ended
Management Fee
2.5%
Hurdle Rate
15%
Carried Interest
50%
Standard Term
2 years
Break Out Fee
4%
Investment Period
Open, with break-out clause fees
Thank you
adaa Financial Services Ltd
UAE – Dubai – DIFC
Al Fattan Currency House Office 706
Tel: +971 4 37 81 600 Fax: +971 43 85
9002