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OIA posts higher returns from strategic joint ventures

Oman Investment Authority (OIA) – the integrated sovereign wealth fund of the Sultanate of Oman – says its sizable portfolio of strategic joint ventures established in partnership with financial institutions of a number of friendly countries, continues to deliver healthy returns.

Investments across its portfolio of 8 joint ventures were rejigged during 2022 with OIA channeling funds into promising established companies and start-ups, while exiting others, as part of an ongoing strategy to achieve a consistently healthy Internal Rate of Return (IRR) and profitability.

During the year, the Spain-Oman Private Equity Fund established in partnership with Madrid-based financial institution COFIDES, reported investments of EUR 30 Million (OMR 12.63 Million approx) in three Spanish startups: Seabery – a leading company providing assistive technology solutions for vocational education; Agrovinl - company specialized in providing natural ingredients and technology for the beverage industry; and All for padel: An Adidas-licensed firm specializing in the design, manufacture and marketing of padel courts, rackets, and accessories.

Set up with a total investment size of EUR 200 Million, the private equity fund currently has 10 investments in its portfolio. Al-Hosn Investment Company, an Omani-Qatari company, with an investment size of OMR 250 Million – one of the largest in the portfolio – has seen its investments grow a total of 16 during the year.

The fund, set up to invest in key Economic Sectors in Oman and the GCC, has invested in the recently listed Pearl REIF of the Sultanate of Oman, as well as in the bonds of Oman Arab Bank, Bank Dhofar and Ahli Bank.

Uzbek-Oman Investment Company, a JV with the Uzbekistan Fund for Reconstruction and Development (UFRD), is currently restructuring its portfolio of 10 investments.
As part of the exercise, the JV will exit some investments and focus on high-return assets with the goal of maintaining the portfolio’s value, said OIA in its report.

Oman Brunei Investment Company, established in partnership with the Brunei Investment Agency, also reported significant activity during the year.

It secured a cash injection of OMR 4.6 Million from shareholders to be invested in a private school project in Oman in partnership with the Royal Oman Police Pension Fund and Amity Education Group.

Construction work on the school project is set to commence in Q3 this year. The JV also exited from Golden Corporation, with an IRR of 15 per cent, and realizing 1.52 times the value of the investment.

Divestments were also reported by the Vietnam Oman Investment, set up in partnership with the State Capital Investment Corporation of Vietnam. In addition to divesting 70 per cent of its stake in local investment company CII, the fund also plans to exit the remaining stake during the year. Also envisaged is a complete exit from well-known business group Kim Tin.

Pak-Oman Investment Company, a partnership of the governments of Oman and Pakistan, posted an 8.8 per cent growth in assets. Current investments are in bonds and treasury bills, said OIA in its report. Oman India Joint Investment Fund (Fund I), established in partnership with the State Bank of India, has three investments in its portfolio, down from 7 earlier, following a decision to divest from four investments.

The exit yielded 1.4 times the value of the investments. Similarly, Oman India Joint Investment Fund (Fund II), also a JV with State Bank of India, currently has portfolio of 12 investments across various sector. One divestment during the year achieved an IRR of 92% and 3.1 times the value of the investment, OIA added.

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