MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Bahrain
Focus: Industry Perspective
Shakeel Sarwar – Head of Asset Management –
Securities and Investment Company (SICO)
Q/ Please describe your firm.
A/ SICO was incorporated as a joint stock
company in Bahrain in 1995. Our first fund was
launched in 1998, a Bahrain dedicated fund. Since
then, a family of GCC focused funds have been
launched by SICO, including our flagship - Khaleej
Equity Fund – in 2004. Additionally, we manage discretionary portfolios and third party
funds. Currently, total Assets Under Management (AUMs) stand at approximately US$
600 million. SICO’s investor base is predominantly institutional and this has enhanced
the stability of our operations.
Q/ What were the trends in fund flows recently ?
A/ Investors’ equity risk aversion is the single biggest challenge faced by the regional
asset management industry which is predominantly equity focused. Capital losses from
two market crashes (2006 and 2008) have badly hurt GCC investors. As a result, equity
focused fund managers have been under pressure with regards to fund flows in the past
3-4 years. In spite of this, as a result of winning several investment mandates SICO’s
AUM has increased on a net basis during this period. Year-to-date in 2012, the overall
AUM has increased by approximately US$ 30 million.
Q/ What factors were the drivers for the flows described above?
A/ SICO has been successful in maintaining and growing its investment base while many
competitors have been stressed. One reason behind SICO’s success has been the
strong performance of its funds. Regional (and international) markets have been subject
to several shocks since 2006, with the GCC among the worst performing equity markets
for the past 7 years - with the S&P GCC index dropping 57% during this period. SICO
funds, however, have performed robustly with our flagship fund, the Khaleej Equity Fund,
generating a positive return of 6% during this period which is superior to its benchmark
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