Waha Capital initiates fresh income generating Islamic fund

Waha Capital has announced the launch of a new income-focused Islamic fund, adding to its three existing funds within its asset management business.

The new fund, to be called “Waha Islamic Income Fund SP”, will invest in Sharia compliant assets across the Sukuk and equity markets, and will also have a global outreach for investments.

Waha Capital is an investment company in Abu Dhabi. The fund is to be open-ended, and is expected to have a capacity in excess of $500 million.

Commenting on the new fund, Amr AlMenhali, CEO of Waha Capital, said, “While our existing funds have some Sharia compliant elements in them, there has been a steadily growing demand from our existing clients over the past couple of years for us to develop such a fully-fledged Islamic fund. We are confident that the new fund will be well received because it avoids investment in prohibited or controversial activities or assets and business sectors that may be considered as particularly risky or potentially volatile. It will also only invest in entities that have relatively low gearing.”

Amr AlMenhali added, “Waha Capital intends to use its proven expertise to bridge a gap in what our clients are seeking from us, so as to offer them an actively managed, income producing Sharia compliant solution with a global dimension. We are positioning this new fund as a focal point around which we can build a whole Sharia compliant offering.”

Waha Capital’s investors represent a diversified mix of institutions (pension funds, endowments, SWFs, and family offices) from North America, Europe and the GCC. Waha Capital also invests in its own funds.

Waha Capital earlier has announced an investment of Dhs184 million ($50 million) in Despegar.com, a leading NYSE-listed company in the online travel sector.

An addition to its investment programme initiated in May comprising a total of up to $150 million in US-listed companies, the new investment supports Waha Capital’s growth strategy for its Private Investments portfolio.As part of the investment, Waha Capital will also appoint a representative to the company’s Board of Directors.

Waha Capital and Despegar.com entered into a private placement through which Waha Capital will invest in series B preferred shares convertible into ordinary shares for an aggregate purchase price of Dhs184 million ($50 million).

Amr Al Menhali, Chief Executive Officer for Waha Capital, said: “As was evident in our recently announced first half financial results, we are pursuing a vigorous turnaround strategy to position Waha Capital for renewed growth in the coming years. We are confident that investments such as the one we are making in Despegar will put us on a firm footing to deliver significantly higher future returns for our shareholders as we successfully navigate past the impact of COVID-19 and look to the future. We are excited about our investment in Despegar.com, a leading technology company focused on the travel sector, with a best-in-class platform, established brand leadership, and a high quality management team.”

The investment in Despegar.com, which is listed on the NYSE, further diversifies Waha Capital’s investment portfolio into both a new sector and a new region. Despegar is the leading online travel company in Latin America, and one of the most recognized brands in the region. Despegar offers consumers an expansive selection of options, and its partners and travel suppliers, a comprehensive and innovative technology platform for managing the distribution of their products. The company offers a unique combination of broad product offerings and flexible payment capabilities, making it the platform of choice with the highest market share in the region.

This investment further underscores Waha Capital’s strategy of investing in companies that have strong growth potential and are market leaders in their segments. Despegar is well-positioned to benefit from an accelerating shift to online consumer purchases driven both by technology advancement as well as the accelerated adoption of e-commerce due to the impact of COVID-19.

Latin American online travel bookings are expected to accelerate in the coming years, once the effects of the COVID-19 pandemic have subsided. Factors driving the growth in online travel bookings include the increase of internet penetration, further adoption of smartphones, tablets and other mobile devices and a growing middle class with greater access to banking services and credit products, together enabling a larger segment of the population to transact online or on mobile devices. The company offers the broadest travel portfolio, with inventory from global suppliers, including over 270 airlines and over 690,000 hotels, as well as some 1,260 car rental agencies and approximately 200 destination services suppliers.

WAM