Mumtalakat 2019 Annual Report

Our Investments

Our Investments Sectors

Click here to read more information about our sectors.

Aviation

Aviation plays an indispensable role in the global economy, connecting countries, people, and products with a speed and reach unmatched by any other mode of transport. Global airline passenger traffic rose 4.2% last year, according to the International Air Transport Association (IATA) and air cargo plays a key role within supply chains. Improvements in productivity and reductions in costs are creating interesting prospects for us and guiding our approach.

Portfolio Updates

Gulf Air marked its 70th anniversary this year and recorded a 13% increase in revenue from USD 971.0 million in 2018 to USD 1.09 billion in 2019. The growth can be attributed to the addition of 2 Boeing 787-9 Dreamliner’s and 4 Airbus A320neos to the fleet, and a corresponding expansion of the airline’s network to include Malaga, Male and Salalah. The Airline launched a Boutique Business Model concept in 2019 and was recognized and awarded as the Fastest Growing Airline in the Middle East.

Consumer Services

Mumtalakat is committed to developing the consumer services sector in Bahrain, which serves to deliver a diversified range of consumer products to the market.

Portfolio Updates

Mazad auction of Ministry of Justice & Islamic Finance court assets
In August 2019, Mazad launched the first online auction of vehicles within the framework of its agreement with the Ministry of Justice and Islamic Affairs and in cooperation with the Supreme Council for Justice. The online auction, in which 56 vehicles were allocated, represents the Ministry’s interest in strategic partnerships with the private sector for improved efficiency, transparency, and competition.
CIJBO Annual Congress 2019
The Bahrain Institute for Pearls and Gemstones (DANAT) hosted the 2019 CIBJO Annual Congress, which drew World Jewellery Confederation delegates from over 20 countries to participate in annual meetings held by CIBJO’s sectoral commissions. The World Jewellery Confederation Education Foundation (WJCEF) also reported on its ongoing cooperation with CIBJO and the United Nations, in particular its commitment to the UN’s Sustainable Development Goals. The Congress took place during the prestigious Jewellery Arabia consumer trade show.

Education

Investing in education means investing in the future, as the social and economic benefits of quality education can impact a country for generations to come. In light of emerging education technologies, the education sector holds tremendous growth potential and remains one of our key target sectors locally, regionally, and internationally. Our investments cover education at the preschool, junior, secondary, and tertiary levels, as well as training and education support services.

Portfolio Updates

Elm Education Fund
In June 2019, we successfully completed an investment in Elm Education Fund, a Bahrain-based education platform aimed at developing the education sector in Bahrain and the wider region.
American University of Bahrain
Through the Elm Education Fund we invested in the American University of Bahrain (AUBH), the first purpose-built American-style university in the Kingdom with a state of the art, 75,000 square metre campus in Riffa. Opening its doors in September 2019, AUBH offers programmes in business and management, engineering, and architecture and design.
Investment in the American School of Bahrain
Elm has also entered into a joint venture with a prominent operator of American curriculum K12 schools to co-own and operate a school in Bahrain.The American School of Bahrain (ASB) also offers the International Baccalaureate (IB) diploma as an option in Grades 11 and 12. Scheduled to start classes in September 2020, ASB has launched admissions for KG1 through to Grade 8. ASB is operated by ESol, an American international school operator which serves over 10,000 students in high-quality, accredited schools in Abu Dhabi, Dubai, Hong Kong, Cairo, Cyprus, and Lebanon.
Divestment from GEMS Education
In July 2019, Mumtalakat, as part of a consortium of co-investors led by Fajr capital and including the Tactical Opportunities Fund managed by Blackstone, successfully completed their divestment from GEMS Education, selling to a consortium of funds advised by CVC Capital Partners (CVC Funds).GEMS Education, founded in the UAE, educates over 120,000 students across more than 40 schools in the Middle East. Fajr Capital, Blackstone and Mumtalakat invested in GEMS Education in 2014 and subsequently partnered with the Varkey Group to build the company into a world-class institution and support its long-term growth. Over the past five years, GEMS Education has delivered strong financial and academic results, investing over USD 1 billion in new schools and upgrades of existing infrastructure. It has grown in its existing market in the UAE and entered into new markets such as theKingdom of Saudi Arabia.

Food & Agriculture

Food security is an important national objective that contributes to comprehensive and sustainable development. Mumtalakat prioritises initiatives which support the conservation, enhancement, and efficient utilisation of the Kingdom’s natural agricultural and marine resources, and promote the productivity of the food and agriculture sector.

Portfolio Updates

Bahrain Flour Mills posts 55 percent increase in income
Bahrain Flour Mills (BFM) reported a net income of BD 1.85 million for year-end 2019, a 55% increase from the BD 1.20 million reported the previous year.

Financial Services

Clusters of innovation continue to impact the financial services sector. Customers are becoming more empowered as economies continue to move towards becoming cashless societies. With the rise in fintech and distributed capital raising platforms across the value chain, we remain focused on value-creating initiatives within our existing portfolio, and seeking commercially viable investment opportunities.

Portfolio Updates

Investment in Sovcombank
As part of the Russian Direct Investment Fund (RDIF) co-investment programme, Mumtalakat invested in Sovcombank, one of the largest and most profitable privately-owned banks in Russia. The bank offers a full range of services to individual and corporate clients through 2,700 offices across Russia.
Al Waha Fund of Funds
During 2019, Al Waha Fund of Funds reached an important milestone by investing 50% of its USD 100 million fund in its first year of operation. Furthermore, Al Waha announced its partnership with Beijing-based VC, MSA Capital via its investment in their USD 250 million Fund, offering Bahraini firms access to Chinese capital and technology best practices.

Healthcare

Driven by increasing wealth, aging populations, and concerns linked to lifestyle, the global healthcare industry represents a growing opportunity for investment. Over the coming decades, medtech will revolutionise healthcare to make it more accessible and effective. Robotics and miniaturisation will enable precision diagnostics and more sophisticated surgical and wearable devices. Artificial Intelligence will enable the analysis of complex biological data for drugs and diagnosis, while virtual healthcare services will become more widespread. Mumtalakat is poised to capitalise on this transformation with its investments in the sector.

Portfolio Updates

Investment in Charleston Holding
In 2019, our portfolio company KOS Group, a leading Italian healthcare group focusing on the provision of long-term care and post-acute rehabilitation, carried out its first European expansion. The Group acquired Charleston Holding, a Germany-based long-term care operator with 4,050 beds across 47 facilities. With the acquisition, KOS will now be managing over 12,200 beds spanning 133 facilities and approximately 11,200 employees.

Industrial Manufacturing

Industrial manufacturing is one of the most important contributors to the national economy, offering opportunities for upstream and downstream investment and providing the foundation for related industries to emerge. Mumtalakat maintains a diversified set of investments within the sector, which remained resilient in 2019 in spite of strained supply chains and other challenges.

Portfolio Updates

Completion of Alba Line 6 expansion
Alba successfully completed the Line 6 expansion project in 2019, which enabled it to achieve an all-time production record of 1.37 million metric tonnes per year, a 35% increase from the previous year. The project is a significant milestone as it encourages investment opportunities through downstream aluminium investments and creates employment opportunities across the aluminium value chain in Bahrain. Alba refinanced their USD 1.5 billion syndicated loan facility in November 2019 with improved credit terms.
McLaren produces 20,000th supercar
McLaren Automotive in Woking, Surrey, United Kingdom marked an important milestone as it rolled out its 20,000th car in Q1 2019, eight years after producing its first vehicle. The facility now produces more than 20 supercars a day, with 90% being exported to 32 different markets. The higher volume of cars sold saw McLaren’s revenues increase 18% from last year.Furthermore, the McLaren Racing Team offered an impressive performance at Formula 1, securing fourth place in the 2019 Constructors’ World Championship.
Minority equity stake in Premo Group
Mumtalakat acquired a significant minority equity stake in Spain-based Premo Group (Premo), a leading manufacturer of customised passive electromagnetic components for applications in the automotive, telecommunications and electronics industries, amongst others.
The investment, Mumtalakat’s second in Spain, provides significant long-term backing for Premo’s expansion plans in strategic market segments, including the supply of inductive components for electric vehicles (EV/HEVs) and motion-tracking technology for other growing markets such as augmented/virtual reality (AR/VR). With the upsurge in electric vehicle production and sales globally, the automotive electromagnetics market is projected to grow six times by 2025, and Premo is well positioned to benefit from these strong market trends.
Expansion plans for Aleastur
Aleastur is a leading manufacturer of specialty aluminium grain refiners and master alloys for the aluminium industry based in Spain.
Mumtalakat is supporting Aleastur’s plans to establish a presence in Bahrain to cater to the company’s existing client base in the region and target new customers in Asia, including smelters and casting operations. The project expects to commence commercial operations in mid-2021. This initiative is part of Mumtalakat’s wider strategy to support the Kingdom’s aluminium downstream sector.
Divestment from Polyus
Mumtalakat successfully exited from Polyus, the largest gold producer in Russia and one of the top 10 gold mining companies globally, as part of the Russian Direct Investment Fund (RDIF) co-investment programme.

Real Estate & Tourism

The real estate team focuses on two main verticals, namely value creation from the existing portfolio and new investments in international real estate. Mumtalakat investments in international real estate, with a focus on the US and European markets, is aimed at achieving long-term and sustainable returns.

Portfolio Updates

In 2019, local real estate development lands were successfully consolidated under Edamah, a 100% subsidiary of Mumtalakat, and our real estate development arm. Healthy dividends continue to be received by the international real estate portfolio in line with their respective business plans.
Edamah’s award-winning Sa’ada Project, a vibrant lifestyle development on the Muharraq waterfront was completed in December 2019. Featuring retail outlets, community spaces, and a family entertainment centre, the project will add value to the community and economy and highlight local heritage by linking Muharraq Souq to the water’s edge.

Telecommunications, Media & Technology (TMT)

Advancements in the TMT field underpin economic growth across all sectors, transforming entire industries. Our investments in Fintech, Edutech, Medtech, and more complement sectors such as financial services, education, and healthcare. We are also focused on enhancing the Kingdom’s technological capabilities in areas such as e-commerce and cybersecurity, to help support sustained economic development.

Portfolio Updates

Official launch of BNET
BNET, Bahrain’s National Broadband Network, an offshoot of Batelco, was launched in 2019 and forms a key part of the 4th National Telecommunication Plan (NTP4) to grow and economically diversify Bahrain’s telecommunications sector. BNET will provide broadband network services to all licensed operators including Batelco, with Batelco focusing solely on retail and corporate operations.
Sale of QualityNet stake
Batelco also announced the sale of its 90% shareholding in its Kuwaiti subsidiary, QualityNet, to Kuwait Telecommunications Company (VIVA), with a total transaction value of BD 31.6 million.
Radio Bahrain
Radio Bahrain English Channel (96.5 FM) joined the Group through the newly established Radio Bahrain Company. A wholly owned subsidiary of Mumtalakat, Radio Bahrain Company has been granted operating and broadcasting rights for Radio Bahrain English Station for 10 years.

Transportation and Logistics (T&L)

The transportation and logistics industry is undergoing massive changes in the face of technologies such as the Internet of Things, blockchain, robotic systems, and more. As one of the backbones of international trade, the industry is instrumental to economic growth and progress and is valued at over USD 6.2 trillion worldwide.

Portfolio Updates

Investment in Transport Concession Company
As part of the Russian Direct Investment Fund (RDIF) co-investment programme, we entered an investment into Transport Concession Company, an entity responsible for implementing the national concession public-private partnership project agreement for the construction and operation of the new light tram in Russia.