Kuwait Investments, Global Securities House and Gatehouse Bank
Interview with Fahed Faisal Boodai, Gatehouse Bank. When we at Kuwait Global Securities House say cherry picking we look at this from two points. One, from the investor’s standpoint what does the investor and what are the clients needs in this market? For example, In 2002-2003 Kuwait Global Securities House invested heavily in GCC and Kuwait real estate but slowed down in 2004 – that is where the cherry picking comes in and where opportunities began to be handpicked. Most importantly real estate and investment are all about timing. In 2006-2007, Global Securities House started exiting some of these investments and I think that that was very smart because given the economic downturn we recently witnessed Global Securities House would have really been hurt.
You are very young but Gatehouse Bank just received the “World Best Islamic Bank” Award. What does this award mean to you?
Global Securities House has a strategy of cherry picking the most attractive opportunities and expanding upon them. How would you characterize your investment strategy and explain more details regarding the key fields you invest in?
Islamic Banking and Kuwait Investments, Global Securities House and Gatehouse Bank, Chairman, Fahed Faisal Boodai: I think that when we say cherry picking we look at this from two points. One, from the investor’s standpoint what does the investor and what are the clients needs in this market? For example, In 2002-2003 we invested heavily in real estate but slowed down in 2004 – that is where the cherry picking comes in and where opportunities began to be handpicked. Most importantly real estate and investment are all about timing. In 2006-2007 we started exiting some of these investments and I think that that was very smart because given the economic downturn we recently witnessed we should have really been hurt. We are very stringent regarding timing with the market for our clients well being. We have invested in three different major liquid markets: London, Paris, and the US. We haven’t done much development but mostly long-lease, strong tenant cash flow type of real estate assets and that’s where it is cherry picking. We pick what works and what is in demand at the time.
How would you define your major challenge?
Islamic Banking and Kuwait Investments, Global Securities House and Gatehouse Bank, Chairman, Fahed Faisal Boodai: To hold back in times, where it is not right to invest. It is very difficult to hold back and do nothing but wait until the opportunities come back. We put our efforts to establish a bank in 2007-2008 to build something that would be at the forefront of the financial markets in the UK and take the opportunity now to launch some new products when the markets have already been hit.
How does Global Securities House address sustainable development in terms of both internal procedures and investments you are making?
Islamic Banking and Kuwait Investments, Global Securities House and Gatehouse Bank, Chairman, Fahed Faisal Boodai: The Gatehouse view for sustainable investments is that we have launched the first shariah compliant waterfront with SAM which will focus on water and the purification process as an asset class. This is a public equity fund that is highly liquid but investing in an industry that will have future growth and potential as a result of the sociopolitical angle on sustainable assets. We are focusing on real estate now that will confer with the environment and most of our assets we are looking to purchase will already have had to been accredited by an environmental perspective to avoid buying buildings that are environmentally hazardous. Healthcare and smart buildings are also another area to look at when looking to the future of sustainable development for us as well.
After exiting the UK real estate market in 2007 you came back due to the strength of its exceptional investment opportunity; what are you expansion plans and strategic goals for 2010?
Islamic Banking and Kuwait Investments, Global Securities House and Gatehouse Bank, Chairman, Fahed Faisal Boodai: The two key words that you use are exceptional opportunity and after exiting in 2007 our intention was to hold until 2008-2009 but the markets had been at a high so we thought we reached our goals early on and we make a decision to exit at that time which was a smart move looking back. When I say coming back to 2009 regarding this exceptional opportunity, two major points come into play. One, the location in London and two, the tenant we have in place. In London, there are specific lease terms that are very long and this is an eleven year reexamining lease and hopefully at that time the market will have rebounded. This is where the cherry picking comes in. There are a lot of investment opportunities every day on your desk but that one, in particular, stood out. We think today it will be very difficult to find the same characteristics in a deal as we get more into the recovery of this economy and the investment environment. Our product delivers to our clients and investors a cash flow distribution on a monthly basis. Looking forward to new investments it will combine the same characteristics: something with a strong tenant, government risk, or a very strong credit like Proctor and Gamble that has 80 billion in sales and 3 billion people using their products on a daily basis. These are strong statements that the market and investors will probably take the risk in investing in.
To finalize the interview, how to envision Global Securities House and Gatehouse Bank in 2015?
Islamic Banking and Kuwait Investments, Global Securities House and Gatehouse Bank, Chairman, Fahed Faisal Boodai: Global Securities House and Gatehouse are sister companies. Gatehouse is out of London and London is becoming the financial capital of the world- perhaps, even taking away the steam from New York. I think that being based in London in the middle of the most important financial center in the world we will be able to use our knowledge of shari’ah, our expertise of structuring products for the market, and our strengths to build a new model that from a compliance point of view highly compliant, to build a new banking model of transparency and also only bring in products that will work from a risk-reward perspective. We think we can spring board from the mistakes that have happened and we have invested heavily in our risk team and we have four individuals in that unit and it will be at the forefront. We will be very transparent with our clients and the risks involved in their investments and we will only bring into the market what the market wants. If we can put that together I think we will have built a successful investment banking platform that can really utilize this environment as strength for it at Grow. Global Securities House already has the track record to do this. We have been around 10 years now and build a reputation for buying and selling at the right times and making smart investments. If we can put our focuses together I think we will have a very strong, winning team between London catering to the world and Global Securities House in Kuwait which will cater to the GCC region.