Mumtalakat’s strategy is designed to fulfil its long term objective of enhancing the value of its portfolio, which represents a source of future wealth for the people of Bahrain. Mumtalakat seeks to increase the value of its investment portfolio as a whole through the following strategies:
Identification and implementation of value-enhancing initiatives at its portfolio companies:
A core element of Mumtalakat’s strategy is to enhance value at its existing portfolio companies. Mumtalakat is an active shareholder and exerts its influence through its nominee directors appointed to the boards of its portfolio companies. Through this governance structure, Mumtalakat has supported significant value-enhancing initiatives across its portfolio of investments and expects to continue supporting such initiatives. Implementation of past Mumtalakat supported initiatives has led to operational restructurings, appointments of key management personnel, and refinements of strategy and growth plans at select portfolio companies. To ensure Mumtalakat’s nominee directors are properly equipped to execute their duties at the boards of companies, Mumtalakat undertakes proactive steps to train and educate its representatives.
Further investments for growth of the portfolio:
Mumtalakat seeks direct investments in companies with established track records of growth and profitability that demonstrate potential for continued expansion. Mumtalakat is primarily focused on investing in companies that are market leaders with strong management teams and effective governance systems. Mumtalakat’s typical approach to such investments is to establish a significant minority interest in the equity of the company and to secure board representation and appropriate shareholder rights. Such investments are primarily driven on the basis of expected financial returns.
Within Bahrain, Mumtalakat also seeks opportunities to develop companies and projects that take advantage of Bahrain’s appeal and strong positioning as a regional business hub and a popular tourism destination. In such opportunities, Mumtalakat’s involvement is subject to critical analysis of commercial feasibility and Mumtalakat’s requirement to generate appropriate financial returns on its investment.
Carefully planned portfolio adjustments, which may include partial or complete divesting of select assets:
Mumtalakat continuously evaluates opportunities for partial or complete exits of direct investments within its portfolio. When considering a partial exit, Mumtalakat aims to maintain a significant minority interest in its portfolio companies to maintain board representation. In certain strategic assets, Mumtalakat may continue to hold a majority interest for the foreseeable future.
Diversification of the portfolio:
Over time, Mumtalakat seeks to diversify its portfolio through active portfolio management activities, including investments in new assets and exits from existing investments. Given its significant stakes in several large companies, Mumtalakat is particularly exposed to certain sectors such as industrial manufacturing, aviation, telecommunications and financial services. A fundamental element of Mumtalakat’s long-term strategy with respect to its direct investments portfolio is to diversify its exposures across geographies, sectors and companies.