OBG talks to Sheikh Khalid bin Abdullah Al Khalifa, Chairman, Mumtalakat

Interview: Sheikh Khalid bin Abdullah Al Khalifa

What role does Mumtalakat play in the Bahraini economy, and how does it fulfil its agenda?

SHEIKH KHALID BIN ABDULLAH AL KHALIFA: Mumtalakat plays a vital role in the overall growth of Bahrain’s national economy through its stakes in more than 35 commercial enterprises, including Alba, the National Bank of Bahrain and Batelco. Mumtalakat has adopted a focused approach to investment built on value creation and growth-enhancing initiatives, which contribute to the sustainable growth of its existing portfolio as well as the development of projects in existing and new sectors in Bahrain. Mumtalakat is committed to operating with the financial discipline and rigour of the private financial sector, and adheres to the highest standards of corporate governance in Bahrain and internationally.

How does Mumtalakat’s transparency and corporate governance structure compare to that of other regional sovereign wealth funds?

SHEIKH KHALID: One of our core beliefs is that transparency and corporate governance are essential components of any initiative we undertake. Thus, we are committed to benchmarking against international best practices. Mumtalakat’s efforts in this regard have been recognised globally; the fund has achieved a rating of nine out of 10 for transparency on the Linaburg-Maduell Transparency Index, which is issued by the Sovereign Wealth Fund Institute. This ranking highlights the fund’s leadership position in its peer group and its commitment to adhering to the highest standards of transparency, corporate governance and accountability.

How does Mumtalakat plan to grow its portfolio? Which industry sectors are the most attractive?

SHEIKH KHALID: Our strategy takes a two-pronged approach. First, Mumtalakat works closely with the boards and the management teams at existing portfolio companies to support their value-creation strategies. Once identified, we monitor their implementation. A number of initiatives are already in progress with a particular focus on the telecoms and aluminium sectors. In addition, the fund encourages the adoption of transparency and corporate governance best practices across the entire portfolio. Second, Bahrain has tremendous potential for commercial projects in a variety of industry sectors, including real estate, tourism, health care, manufacturing and financial services – to name a few. Mumtalakat is tasked with identifying market needs and investment opportunities, along with proactively engaging with potential investors and reputable international companies that have identified the Gulf or the wider MENA region as a growth market and Bahrain as a particularly ideal base for that development. We continue to observe promising interest from leading international firms that are looking to partner with Mumtalakat to develop new commercial initiatives in Bahrain for existing and innovative sectors.

What is the significance of Fitch affirming its BBB rating for both Mumtalakat and the kingdom?

SHEIKH KHALID: The strong relationship that Mumtalakat and the sovereign share was highlighted by Fitch’s affirmation of the BBB credit rating with a stable outlook for both, and further underlines the solid economic and financial conditions in the kingdom. This was reinforced again in January of 2013, when Standard & Poor’s reaffirmed its BBB credit rating for Mumtalakat, citing the same strong relationship between Mumtalakat and the sovereign as a key factor in this decision. This reaffirmation reflects the current reality in Bahrain, and is testament to the efforts to realign the kingdom’s growth prospects.

What strategies should Bahrain adopt in order to revitalise its manufacturing base?

SHEIKH KHALID: Bahrain has a long tradition of manufacturing. We recognise the importance of the sector and its role in the long-term sustainable development of the economy, and are proactively exploring the development of an aluminium downstream cluster.