Earlier this week, a United Arab Emirate-based family office supposedly was involved in a big deal with a South African mining company. Here’s the press release.
But try getting any more information on the deal in terms of the name of the family office and there’s nothing more anyone will say about it. OK, when it comes to deal-making few in the Middle East are going to disclose much about the details.
But there’s also another explanation and that is the fact that family offices aren’t really up to much in the region, regardless of what’s going on, or not, with the above deal. Here’s why – very few family offices exist in the region, at least as they might operate like in Europe and North America, despite the large number of wealthy families in the Arabian peninsular.
“There are maybe just five family groups in the UAE that could be said to have set up sophisticated family offices,” says Fathi Ben Grira, CEO of Menacorp, an Abu Dhabi-based corporate financial group. “May be a few more in Saudi Arabia and a few in Kuwait, but there are really not a great deal of well organised family offices in the region.” Menacorp is owned by the Bin Hamoodahs, a prominent Emirati family dynasty.
Ben Grira went on to say that when Middle East family offices are talked about often they refer to the investment arm of a family business. “They are usually connected to the finance department of a business and are run by a trusted employee,” he added.
As Family Capital has reported before, holding company structures often comprise an imbedded family office structure within them. These types of structures are prominent within the Middle East, Latin America and Asia.
That said, Ben Grira did say that many family-run groups in the region are attempting to make themselves more appealing to financial houses, improving governance structures and setting up family offices as part of this process.“Through these efforts, we are seeing some firms separating the operational business and the family assets, but the process is slow.”
Some fully-functional family offices in the region include the AlTouq Group, run from Riyadh and managing the money of the AlTouq family, and KBW Investments, run by Prince Khaled bin Alwaleed, the son of Prince Alwaleed Bin Talal, one of Saudi Arabia’s richest individuals.