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"Our geographic footprint includes some of the world's fastest growing economies namely the Middle East, including the GCC and North Africa, as well as Emerging Asia ("MENASIA")," commented Ziad Makkawi, Founder & CEO, Algebra Capital Ltd. Currently, the industry trend is towards local asset management and this is being reinforced by fast developing capital markets and attractive investment opportunities. Three years ago we predicted that regional assets under management would hit $75bn by 2010. We have almost passed that mark three years early, and see this trend continuing in the future, to exceed $200bn.
"Algebra Capital focuses on one task and one task only, asset management. With one of the strongest management teams and the longest combined track record in the Middle East, we seek to position Algebra Capital as a market leader in the regional asset management space, with at least $4bn under management by 2012. In doing so, we also seek to contribute to the DIFC's ambition of becoming an international financial center," Makkawi concluded.
The potential for growth in both public and private markets is sizeable. The region has a current ratio of assets under management ("AUM") to market capitalization of less than 7.2% compared to an emerging market average of 25% and developed market averages ranging between 70%-80%.
Makkawi continued,
"The potential in the asset management business is too significant to ignore. To almost triple the size of regional AUMs, an industry growth rate of 23.5% over 5 years is comfortably in line with growth rates recorded in other emerging markets during earlier stages in their respective capital markets development. Singapore, Brazil, and China all grew at compounded annual growth rates between 20% and 40%."
While trade flows continue to grow and accelerate, capital flows between and among the MENA and Emerging Asia regions is also increasing. Research shows that total cross border investments between the GCC and Asia are predicted to climb from $15bn today to $300bn over the next decade. "The GCC economic boom, combined with increased liquidity and wealth is spurring demand for more sophisticated financial services such as asset management and advisory services," stated Makkawi.
Algebra Capital has been launched to take advantage of the potential of this fast growing market. Lead by a first-rate management team with an established and extensive track-record building and running financial institutions, and successfully managing money in the MENA region, Algebra Capital is set to become the institutional investor's partner of choice in the MENASIA region.
Posted by Medilyn Manibo, Assistant News Editor
