Eshraq Investments Announce New Corporate Strategy for Five Years

Abu Dhabi headquartered Eshraq Investments has announced the launch of its refreshed corporate strategy in the next five years with acquisitions expected to be executed as early as 2024.

Eshraq will build direct private equity (PE) capabilities and exposure, while transitioning legacy portfolio assets. Under the refreshed strategy, Eshraq intends to have control of its destiny by focusing on directly held PE investments, complemented by cash generation from minority equity positions, fixed income assets and real estate to balance the portfolio and support consistency in earnings.

Eshraq Chairman Fahad Al Qassim said that by unveiling the new long-term strategy for growth and shareholder value creation, it intends to become a leading GCC investment company focused on direct PE exposure, with a portfolio that is complemented by investments in income-generating assets.

“With the execution of our strategy, we expect our investment proposition will be characterised by a well-diversified portfolio in growing sectors across the GCC, enabled by a strong balance sheet that offers significant headroom to invest in new and existing assets, driven by a highly experienced Board following the recent appointment of new members in 2023, and a Management team who are ideally suited to sourcing and executing high quality investment opportunities,” he added.

Eshraq’s CEO Mohamed Al Hashimi said that the new strategy will allow them to take control of their destiny.

Today is a first step in a long-term strategic shift, something which both the Board and Management believe is overdue, where Eshraq will maintain a clear focus on directly held, regional PE assets. At the same time, the company will evaluate the best options for transitioning its legacy assets, including certain properties in the real estate portfolio and the future holdings and management of the Goldilocks Fund.

“We plan to make further announcements on both in the near future. I am personally looking forward to embarking on this journey as we capitalise on our very robust balance sheet position to select and execute fresh and compelling investment opportunities,” he added.

Three Strategic Pillars

Private Equity: Eshraq will prioritise direct PE investments as its core business, seeking opportunities with high growth potential to create long-term value, with a focus on efficient sourcing and screening of potential deals to ensure high quality, steady deal flow and the strategic deployment of capital.

Eshraq’s geographical focus will remain unchanged, with investments to be focused on the UAE and wider GCC region, a highly attractive market with strong structural growth drivers. It aims to invest into 1-2 high growth businesses annually, seeking attractive cash flows as assets mature and become ready to exit. The acquisition strategy, while flexible, will focus on opportunities for direct control by holding 50%-70% equity stakes, with deal values in the range of $50 million-$100 million and an anticipated holding period of 5-7 years.

Income Generating Assets: Eshraq will continue to selectively invest in income generating minority equity stakes, fixed income assets and real estate to generate reliable cash flows and balance its investment portfolio.

Liquidity Management: A prudent treasury strategy will be employed to maximize returns on liquid assets. This includes utilising short-term investments, hedging tools and efficient cash management mechanisms to ensure financial resources are readily available to be deployed to compelling investment opportunities.