Arqaam Capital provides the answer to sustained regional growth

As the Gulf’s investment banking sector recovered from the burst of the US equity bubble in 2001, many new players entered the market with a focus on regional wealth repatriation. Today, even traditional banks seem to be realigning themselves to fit this new growth curve. While the Gulf equity markets are delivering strong results, there is a flickering thought in every analyst’s and investor’s mind, “Are these banks riding the liquidity wave or are they here to stay?” Arqaam Capital is a new player in the Middle Eastern market, but has already grounded its roots into the regions’ equity market with an initial capitalization of $140 million. Operating out of offices in Dubai (DIFC) and London, and being one of only a handful of firms with Category 2 authorization from the Dubai Financial Services Authority (DFSA), Arqaam Capital is the result of a consolidation of various financial companies with a successful track record. With international experience under its belt, the company has acquired a strong, regional shareholder base, including institutional and high net worth veterans of the Middle Eastern finance industry. These shareholders and other experienced professionals also form the Board of Directors for the company, divided into Executive, Non-Executive and Independent Non-Executive Directors. Arqaam Capital’s advisory committee also consists of veterans of the trade, such as Sir Bob Reid (ex-Chairman and CEO of Shell UK Limited and Director and Deputy Governor of Halifax Bank of Scotland), George Kardouche (Chairman of the Arab Bankers Association), Mohamed Al-Ohali (President of Al-Bayder Group) and Salman Al Jishi (President of Salman Group). However, the company’s staying power is based on more than just industry know-how and investor interest. Riad Meliti, CEO, Arqaam Capital says, “Most industry players have recognized the opportunity for Gulf equity, however, there still exists a gap between regional commitment, understanding and the level of expertise and international best practice. This gap prevents most new investment banks from thriving. Arqaam Capital intends to bridge this gap with what we call ‘Human Capital Arbitrage’. By creating a team that incorporates international expertise with regional commitment, we intend to stay in business and in fact ahead of the league.” “We are currently engaged in aggressive recruitment drives to bring together the best investment banking talent in the Middle East, supplemented by selective high quality hires from the region, London, New York and other international financial centers. Our priority continues to be the provision of superior service through qualified and relationship-oriented employees who are committed to the communities in which we operate. We believe our success is largely based on the fact that our customers want to deal directly with people they know and trust, and who can provide high levels of service.” Arqaam Capital’s current team is a coalition of experienced investment bankers and other professionals with experience from various international investment entities such as Credit Suisse First Boston, UBS Warburg, Lehman Brothers, Barclays Capital, Deutsche Bank, Citigroup, BNP Paribas, ABN AMRO, Rabobank, WestLB Panmure, Babcock & Brown and others. The intention is to add Capital Market specialists that will enable Arqaam Capital to develop a niche in the region - ‘Equity and Credit Derivatives’. Riad Meliti says, “We are definitely not the first to introduce derivatives into the market, however, our approach is certainly unique.” The Capital Markets team is two-tiered, with an Equity/Fund derivatives team and a Credit Derivatives and Structured financial products team. Both teams will rely on a large pool of resources that will create and deploy comprehensive risk management models. Riad Meliti says, “Arqaam Capital is taking an academic approach to derivatives. Risks are taken using mathematical analysis and quant models that allow for an enhanced risk return profile. This enables in our build up of a market making ability in a new regional derivative market for equities.” “So, as the recruitment drive continues, we are currently a strong team that is ready to move to the next round of capitalization. With experts in bespoke credit structures, structured finance and arbitrage solutions, financial analysis, risk management, IT developers, we are confident of our staying power in the region.”