Private equity specialist upbeat on KSA market

02/02/2015 07:51 AST

Saudi Arabia has around $700 billion in reserves, enough to continue spending at its current rate and oil prices for years to come, says Shailesh Dash, founder and CEO of Al-Masah Capital Ltd. (AMCL).

Of course, “the steep decline in the price of oil has put the Kingdom’s 2015 budget into a deficit of almost $40 billion,” Dash told Arab News in an interview.

AMCL, an alternative investment firm, was set up by Dash and his senior team from the private equity department of Global Investment House (GIH), Kuwait. Within a short time of obtaining its license, AMCL has accumulated a total AUM of more than $500 million.

When asked whether the US shale crude played a big role in bringing down oil prices, which are now hovering near six-year lows, Dash said: “The US advancements in horizontal drilling technology definitely played a large part to the current oil price slump. This technology opened up vast reserves for the US with talks of them becoming energy independent in the near future with reserves that could amount to the largest in the world.”

Saudi Arabia, which is well aware of this fact, decided not to cut production at the latest OPEC meeting and this could be seen as a signal that they are defending their market share as the low-cost producer of crude oil, he said.

Dash cautioned that the first half of the year may be challenging for regional markets; the ramifications of the collapse of oil and the steep selloff in the fourth quarter of last year are still lingering.

“Uncertainty and volatility, two dangerous combinations for any investor, are highly prevalent in the current environment,” said Dash who during his tenure with GIH created and managed in less than five years one of the largest alternative investment businesses in Asia. He founded the private equity business at GIH and during his tenure it became the 16th largest private equity business in Asia (ranked by PEI Asia) and the second in the MENA region, with $3 billion in assets under management.

This included four private equity funds and one permanent capital vehicle, managed by a team of 45 investment professionals from 12 nationalities with deep regional market and transactional experience.

They operated a network of offices in Kuwait, Riyadh, Cairo and Istanbul for deal sourcing and execution.

Prior to that, Dash also established the research platform at GIH, and built it into one of the largest and best regarded in the region.

Dash is considered to be one of the most experienced private equity investors in the region in terms of number of transactions, with more than 58 transactions executed valued $ 1.5 billion. Dash, a postgraduate in business management and a member of the CFA Institute, is also the largest regional investor in medium sized family businesses with more than 30 transactions, most of them sourced through his and his team’s personal relationships.

Arab News