ABU DHABI - Waha Capital PJSC, an Abu Dhabi-listed investment management company, reported net profit of AED148 million for Q1 2023, equating to a return on equity of 8.1 percent.

This strong performance was driven by the exceptional returns delivered by credit and equity funds in its Public Markets business, according to a company press release.

The company recorded total revenue of AED242 million in the first quarter, compared to AED278 million a year earlier. Total expenses increased 32 percent year-on-year to AED62 million, while a higher interest rate environment led to finance costs increasing to AED32 million from AED26 million in Q1 2022.

Waha Investment (previously referred to as Public Markets) which actively manages emerging markets credit and equity funds, reported net investment returns of AED238 million and net profit of AED226 million for the first three months of 2023. The Private Investments business, which pursues a multi-asset investment approach across different sectors and geographies, recorded net investment returns of AED18 million but net loss of AED23 million, due to mark-to-market losses on certain portfolio assets.

Meanwhile, Waha Land generated net investment returns of AED12 million and net profit of AED8 million. Waha Capital’s total assets under management (AUM) stood at AED8.6 billion at the end of March 31, 2023.

Public markets highlights

The Public Markets business (operated by Waha Investment PrJSC, a wholly owned subsidiary) which actively manages emerging markets credit and equity funds, recorded total revenue of AED238 million in the first quarter of 2023, and net income totalling AED226 million. The company's flagship credit and equity funds produced positive returns despite continued volatility in global markets, continuing their exceptional multi-year track record of outperformance.

The Waha MENA Equity Fund achieved a total return of 4.6 percent versus -0.5 percent by its benchmark. The fund has delivered a cumulative return of 299.1 percent since its inception in 2014, versus the S&P Pan Arab Composite Index’s return of 58.8 percent.

The Waha CEEMEA Credit Fund, which pursues long-short fixed income strategies in emerging markets, recorded a total return of 2.7 percent, in line with its benchmark. The fund has delivered a cumulative return of 186.0 percent since its inception in 2012, versus the JPMorgan CEEMEA CEMB Index’s return of 40.4 percent.

The Waha Islamic Income Fund delivered a total return of 1.8 percent (gross of fees) versus a benchmark return of 1.9 percent. The fund, which mainly invests in global sukuk and Shari’ah-compliant equities, has recorded a cumulative return of 61.1 percent (gross of fees), since its inception in 2020.

During the quarter, Waha Investment was mandated to manage AED1.8 billion for an institutional client, bringing total assets under management to AED6.9 billion from AED4.5 billion a year earlier.

Private investments, Waha land highlights

The Private Investments business, which pursues a multi-asset investment approach across different sectors and geographies, recorded net loss of AED23 million in the first three months of 2023, largely due to fair value adjustments on certain assets that have been affected by turbulent global markets.

The business, which had AED900 million of assets under management at the end of the first quarter, continues to deploy and recycle capital across its portfolios, generating AED16 million in cash.

Waha Land, a wholly-owned subsidiary that develops, owns, and operates light industrial real estate assets, recorded total revenue of AED12 million in the first three months of 2023, driven by steady rental income.

Waha Land’s planned AED555 million sale of 17 leased warehouse buildings at the ALMARKAZ Industrial Development, agreed with Peninsula Real Estate Management Limited in August 2022, is expected to close later in 2023.

Following completion of the transaction, Waha Land will continue to focus on developing, leasing, and monetising assets at ALMARKAZ. Peninsula has agreed to acquire an additional 136,000 sq.m of completed and income producing industrial properties that Waha Land is currently developing, with leasing expected to commence once construction is completed.