Ibrahim M Al Alwan on asset management | KSB Capital Group | Video

Transcript

KSB Capital Group is one of the largest asset management businesses in the MENA Region, and provides fund management services in a broad range of asset classes. Ibrahim M Al Alwan, CEO of KSB Capital Group, talks about the asset management sector in Saudi Arabia, how its approach to asset management has adapted to new regulations, and his expectations for the future.

World Finance: So tell us about KSB Capital Group, and what makes you different from the competition?

Ibrahim M Al Alwan: From the beginning, we believe that we have to have a niche market. We have to differentiate ourselves compared with our competitors, and to be a leader in new sectors. And after we made a lot of searches in the market, we saw that real estate investment was not so developed, and not well served by the existing players in the market. So, we focused on this area, and we’re now starting to have new products for real estate. And we create real estate investment funds based on the new regulation from the CMA, the capital markets authority in Saudi. So we launched the first cross-ended real estate fund, and it was really successful at that time. And we got good performance in this fund, and this gave us an advantage over our competitors because we have a niche market, and we have new products in the market. Even our competitors didn’t have. And so this adds value for us, and we believe that we are appealing in this sector.

“We launched the first cross-ended real estate fund, and it was really successful”

World Finance: What can you tell us about how your approach to asset management has developed in recent years?

Ibrahim M Al Alwan: In the beginning, we start with a simple product for real estate investment funds. But after we did some funds, after that, we believed that we have to go to the next stage, of having multi-assets, or multi-projects in one fund. Also, we’re starting to increase the term of the fund itself. We’re starting with short-term, but after that we’re starting to be convinced to have funds with more than two, three, five years, which gives us more flexibility regarding the investment activities.

World Finance: We’ve talked about your asset management approach; what can you then tell us about your corporate governance philosophy?

Ibrahim M Al Alwan: Corporate governance for sure is very important. From the beginning of starting the company, we focused on having to apply the corporate governance in a good manner. And because it really helped us in having the balance between all the stakeholders regarding clients, staff, regulators, and also the public. So, to have all these in balance, by applying the corporate governance, it helps us a lot to get the benefit of these relationships.

“With the new regulations, we see the improvement in the practice in the market”

World Finance: You’ve touched on the new regulations; what impact do you think they will have?

Ibrahim M Al Alwan: With the new regulations, we see the improvement in the practice in the market. We see how the investment banks are starting to focus more on giving a good product, focusing on how to mitigate investors about risks. All these really, we noticed that once the new regulation regarding the corporate governance, and even the investment activities which improved the market. However, at the same time, we have obligations. Investment banks, you know, with the new regulations and with the new corporate governance rules, you have to hire more people to have in the risk management and the corporate governance, as activities. So, all these need to spend and give more time to comply with the new regulations.

World Finance: Now, looking at the asset management sector in Saudi Arabia at large, how has it changed in recent years, do you think?

Ibrahim M Al Alwan: Recent years, we noticed that we’re starting to see products for individuals. In the past, most of the products in the investment management and the investment side, it’s focused on the family business, and the institutions. Right now we noticed that new products, the competition’s coming to the market, so the market’s developed, and we notice a lot of asset under management right now coming from individuals, and even from family offices. They’re starting to be convinced with their local investment banks, to invest with them.

“Right now we are trying to target new markets, we’re targeting also new products, right now especially real estate”

World Finance: And what’s your future outlook, both for the asset management sector in Saudi Arabia, and the strategic vision for KSB?

Ibrahim M Al Alwan: In the beginning we were just focusing on how to improve ourselves, and how we gain the trust from investors and clients. Right now we are trying to target new markets, we’re targeting also new products, right now especially real estate. Saudi Arabia will then have a decent amount of real estate investment trusts, so we are focusing on that. We want to be the main player, or the first to introduce for this product to the market in this one area. And the other area regarding the cores: banking also, we focus on the private equity. A lot of investors, they want to have a partnership, to have activities in the private equity, and have some shares of these companies, and offer it to public or to private investors. I think this is the future for the market in Saudi Arabia.

World Finance: Ibrahim, thank you.

Ibrahim M Al Alwan: You’re welcome.