By focusing on bespoke and intimate investment advisory services since it launched operations 10 years ago, Alpen Capital has won the trust of family businesses in the Gulf and handled transactions worth over $10 billion in the region.
Familiar faces can make all the difference, says Rohit Walia, Executive Chairman of the Dubai-headquartered boutique investment advisory firm, pointing out that among larger banks, staff tend to come and go at a rapid pace. “Every two or three years, you see a new face, but in a smaller outfit there’s more continuity –and that is what a client needs. He wants to see the same person handle his business and get a bit more attention,” he continues, adding that Alpen Capital does not have a large number of clients unlike major banks, which works to the firm’s advantage.
Established in 2005 with its headquarters in Dubai International Finance Centre (DIFC), Alpen Capital got it right from the word go, says Walia.
“We went about it quite systematically, set up office in Dubai and settled down for five years before expanding. In fact, during the crisis years of 2008, 2009 and 2010, we doubled our staff and offices.”
Today, Alpen Capital provides solutions to institutional and corporate clients in the GCC and Asia from its offices in Dubai, Muscat (Oman), Doha (Qatar), Bahrain, and New Delhi and Mumbai (India).
Early this year, Alpen Asset Advisors (AAA), a new independent financial advisory and asset management company was launched in the DIFC, while new Alpen Capital offices in the UAE capital Abu Dhabi and in Riyadh, the capital of Saudi Arabia, will open their doors later in the year.
Elaborating on the launch of AAA, which services high-net-worth individuals and institutions in the Middle East and South Asia, Walia says: “Clients have different needs and we deal with very sophisticated clients who have their own thoughts and ideas. This is why this new multi-banking platform has been set up. Depending on a customer’s requirements, we will talk to the required banks to find a solution – and are one of the first few firms to do so.”
The response, he adds, has been “fabulous and we hope to set up an AAA in Bahrain soon”.
Over the years, Alpen Capital has maintained its conservative approach to business, he points out. “We have been very conservative in the kind of advice we give to our clients and from 2008 to 2010, when most banks went into their shell, we carried on doing what we were doing. Our model has not changed – what we started with 10 years ago has stayed the same.”
Commenting on some of the issues facing family businesses, Walia says that their concerns today are whether to continue running all the businesses they’ve acquired or built over the last decades.
“I think people are taking a very clear look at what should they be doing and putting some kind of a strategy in place on how to manage their businesses going forward, as there is no way they can continue doing everything. So, there are several M&As (mergers and acquisitions) under way with people either buying or selling businesses depending on what suits their portfolios,” he says.
And has the risk profile and appetite for investment of high-net-worth individuals changed over the last few years?
Yes, says Walia, pointing out that investors are now asking more questions about their investments becoming more conservative. “Clients now try to understand what they are doing and they won’t touch anything which is highly geared. Things have changed a lot in the last two or three years and clients are not willing to buy any exciting products.”
On the investment climate in the Middle East and North Africa (Mena), Walia says that mixed signals from central banks about interest rates pose short-term risks but the outlook over the long term is “stable”.
And while GCC equity markets are currently on a roller coaster, Walia is bullish as he feels that many companies in the Gulf “are doing well but are undervalued”.
High-net-worth individuals, meanwhile, are continuing to invest while avoiding political hotspots in the region. “Nobody is going to invest in a place where there is political turmoil. That will have to be on hold, but otherwise it’s business as usual,” says Walia.
Alpen Capital is also a leading provider of research services which adds to its value proposition given the dearth of research material in the region, says Walia. “For instance, if one wants to get into the pharmaceutical business, there is very little research available on the industry. Our expertise gives our clients
the comfort that we know what we are talking about when we advise them on a specific transaction in any of the industries on which we produce research.”
Alpen also promotes cross-border opportunities between the GCC and India and though there has been a change of government in New Delhi, Walia expects Indian firms to continue setting up ventures in the Gulf due to the advantages the region offers in terms of cheap energy, excellent logistics and low credit costs.
“Several Indian companies find the Middle East a good base to export to Africa or the CIS (Commonwealth of Independent States), and although this trend has been around for a long time, it has gathered steam in the last few years. We’ve handled projects in the UAE and Oman and are looking at a couple in Bahrain,” he says, pointing out that most of these are export-oriented manufacturing ventures taking advantage of the reasonable cost of power and logistics in the region, in addition to low credit costs which are “a third of the cost of credit in India”.
Looking at future investment trends, Walia says that the GCC provides a good investment opportunity for Indian companies and “we see more and more Indian companies looking towards the region to set up an alternate base”.