Abu Dhabi Investment House announces net profit of Dhs220m in 2007

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This is 47% higher than last year - distributing a cash dividend of 30% (Dhs0.3 per share) to shareholders.

Mr. Al Khaili said, 'This is the most successful year for ADIH in its third fiscal year. As a fairly young company, ADIH has managed to establish itself as a leading boutique investment house regionally and globally. This is attributed to clear strategy and business model focused on identifying unique investment opportunities that yield high risk adjusted return to investors. This was also assisted by our relationship with the investors, exploiting market conditions with robust economies and flexible government strategies, where ADIH operates.'

The operating income for the year is Dhs304m due to ADIH's investment under strategic plans to build the company's capabilities, developing new business, opening of new offices in Bahrain and Geneva and on the development of the company's human resources.

Return on Capital (ROC) has increased significantly since ADIH's inception. In 2005, ROC was 20%, increasing to 75% in 2006, and further growing to 110% in 2007, while net assets per share increased by 58% in 2007 to Dhs3.03 per share compared to Dhs1.92 per share in 2006.

The balance sheet grew impressively to Dhs853m - an increase of Dhs139m or 20% when compared to December 2006. This reflected strong business growth driven by increase in client investments in ADIH overall funds and projects.

The resultant increase to shareholders' value has allowed a cash dividend of Dhs0.3 per share; a total of Dhs60m. On the social responsibility front, ADIH was involved in several charity events and community service-related activities that included events for the disabled, Zakat and events that catered to helping increase youth activities.

Rashad Y. Janahi, ADIH Member of the Board and Managing Director, said, 'Our 2007 results further demonstrate ADIH's fast and steady growth, as we continued to diversify our portfolio and seized major exit opportunities where possible. Despite the bank's relatively young age, it has succeeded in positioning itself as a major player in the regional market. ADIH will continue to originate unique funds, including Entertainment Cities in India, China and North Africa and other funds related to real estate, in addition to other business lines, particularly in asset management, private equity and corporate finance through experienced and professionals in the industry - all of which will contribute to another successful year.'

'The financial performance could not have been achieved without the unwavering efforts and commitment of the entire ADIH team, who is dedicated to long-term success and returns to shareholders,' he said.

2007 achievements

The Lagoon Fund - successful exit with an ROI of 30%

ADIH's activities and transactions in 2007 spurred the organization's strong performance. These transactions included ADIH's first fund exit, the Lagoon Fund, which yielded a 30% return on investment, above the initial projections. The fund, launched in June 2006 to finance the $ 90 m commercial development: The Lagoon, at Amwaj Islands, managed to raise $ 42 m in equity, invested over its16 month investment period. This over-achievement reflected the significant interest in the project.

Al Arabi Fund - successful partial exit with an IRR of 25%

In addition, ADIH also made a partial exit from Al Arabi Equity Fund, which will give an internal rate of return (IRR) of 25%, above the initial 20% target IRR.

Entertainment City

In 2007, the Entertainment City concept was introduced. A mixed-use mega development, combining the clusters of residential, entertainment and retail that is set to be developed and implemented in the GCC, India, China and North Africa - with a cost of more than $10bn. To further ensure the concept is implemented according to international standards, the Entertainment City Advisory Board consisting of major leaders of the Entertainment industry was appointed in fourth quarter of 2007. Areas that the Advisory Board will be consulting on include: entertainment family centre and theme park operations, entertainment and sports events, performances and exhibitions, entertainment design and master planning, international entertainment and educational museums, entertainment and sports news and entertainment brands and sponsorship.

Advisory Board members include the following members: Juha Tiihonen - Chairman and CEO, Starcut USA, Inc.; Joel Katz - Greenberg Traurig ; Charlie Besser - President and CEO, Intersports, ; Charles ; Mark Shapiro - President and CEO, Six Flags; Norm Chirite - Managing Director, RedZone Capital; Terry Stewart - President and CEO, Rock and Roll Hall of Fame; Bea Perez - Vice President, Coca Cola; Bruce Eskowitz - President and CEO - Premier Exhibitions; Charles Goldstuck - President and COO, Sony BMG and Randy Philips - President and CEO, AEG Live.

Qatar Entertainment City

Through a $500m fund introduced and launched by ADIH, the first of these 'Entertainment Cities' is currently being implemented in Lusail - State of Qatar. Entertainment City Holding Company is responsible for providing the complete infrastructure of each component within Entertainment City. The holding company will also sub-divide the land plot into parcels and develop blueprint packages. The projected return on investment (ROI) is 60%. The development promises to be a regional hub for luxury living, leisure and entertainment. Subsequent to year-end, this will rolled out in India with the launch of the India Entertainment City fund in 2008, aimed to raise financing for the concept's implementation in the heart of India's entertainment industry.

Porta Reef

A $34m fund was created and launched to finance the $90m freehold residential towers in the prestigious Reef Island, Kingdom of Bahrain. This two-year investment has an expected annual internal rate of return (IRR) of at least 20%. The total size of the fund is $37,000,000 comprising 3,700,000 shares denominated at $10 per share. ADIH's investment contribution was $1m. The fund witnessed huge demand and oversubscription at the closing in 31 December 2007. During the first sales' phase of the project to end users, sales totalled over 60% of the entire project.

Sunset Hills

The $33m fund was launched to finance the $90m residential compound located in the Al Areen development - south of the Kingdom of Bahrain. Projected annual IRR is a minimum 20% over a 30-month investment period with an expected project cost of $90m. Approximately 50% of the project has already been sold to end users.

Lagoon Leasing

The fund is a $24m 3-year fund which offers investors a minimum annual IRR of 20% by investing in 60% direct equity interest in the Lagoon Real Estate Development Company (LRED) which in turn owns a substantial number of commercial units in the strategically located Lagoon project that comprises of 119 commercial real estate units on Amwaj Islands, in the Kingdom of Bahrain.

Al Joud GCC Equity Fund

Towards the end of 2007, ADIH launched the Al Joud GCC Equity Fund, which will invest primarily in listed securities issued in the GCC countries, in accordance with Sharia Investment Guidelines. ADIH will invest $5m as seed capital in the fund. ADIH's prudent investment strategy is evidenced in this investment as the fund's launch comes at an opportune time, given the strong real GDP growth rates that are being witnessed across the GCC, and growing clients' appetite in investing wealth that was traditionally invested outside the region back into their home countries. With robust domestic demand and an increasingly diversified industry base, the GCC provides investors a welcome hedge against volatile global markets which are expected to witness an upcoming slowdown.

Physical expansion

ADIH Bahrain

The office was created to cater to investors from one of the region's most important financial hubs and to emphasize ADIH's intention to establish regional presence. The ADIH Bahrain representative office is regulated and under the governance of the Central Bank of Bahrain.

ADIH Geneva

Announced in 2007, this office signifies the ADIH expansion into the European continent in a confident and strong manner - by employing specialized and professional management team. The office will mainly be conducting Wealth Management services to clients based in the Middle East wishing to invest in Europe and providing a gateway for western investors into the GCC market.