Bahrain's Mumtalakat eyes new investments as portfolio improves

DAVOS, Switzerland Thu Jan 23, 2014 2:51pm EST

DAVOS, Switzerland Jan 23 (Reuters) - The finances of Bahrain's sovereign wealth fund Mumtalakat are improving, allowing it to look for new investments more agressively this year, its chief executive said on Thursday.

With $7.1 billion of assets under management at the end of September, Mumtalakat is one of the smaller sovereign funds in the Gulf, but it plays an important role in Bahrain's economy: it holds stakes in 40 non-oil firms, including Bahrain Telecommunications and Aluminium Bahrain.

It posted a net loss of 181.7 million dinars ($482 million) in 2012, after a loss of 270.6 million dinars in 2011, partly because of financial trouble at Bahrain's struggling national carrier Gulf Air.

But the performance of its portfolio is now improving while Gulf Air is narrowing its losses, creating room for Mumtalakat to look at fresh investments, Mahmood al-Kooheji told Reuters on the sidelines of the World Economic Forum in Davos.

"For the first half of 2013, we made 50 million dinars compared to a loss of 35 million last year. We hope to report a profit for 2013 and a major improvement from the year before," he said.

"We have managed to restructure Gulf Air and the government is financing its losses. It's now part of the government budget. This gives us a breathing space and the capability of making new deals."

Kooheji said Mumtalakat now had a budget of over 150 million dinars for investments.

"This year we will be more active in investments," he said. "We are looking across the globe and open for investments in all sectors except aviation and real estate. We're very active in the broader ICT (information and communications technology) space and hope to do some acquisitions there."

Gulf Air's acting chief executive Maher al-Musallam said last week that it had completed its restructuring, which began in 2009 and involved a 27 percent staff cut, the closure of loss-making routes and changes to plane orders.

"Gulf Air needs three to four years down the line to reach break-even," Kooheji said. (Editing by Andrew Torchia)