Abu Dhabi-listed company's public market funds outperformed reference indexes despite high market volatility

Waha Capital, which counts Mubadala Investment Company among its shareholders, reported a significantly lower profit for the first half of 2022, reflecting a fall in valuations of both its public markets and private investments businesses.

The Abu Dhabi-listed investment management company reported Dh87.28 million ($23.24m) in profit attributable to its owners in the six months ended June 30, down 67 per cent from Dh264.48m in the same period last year, the company said in a statement to the Abu Dhabi Securities Exchange where its shares are traded.

In the second quarter, Waha Capital recorded a net loss of Dh59.34m compared with Dh153.9m in the same quarter last year.

The significant fall in global markets was reflected in a decline in mark-to-market valuations for holdings in listed securities, the company said.

“Although Waha Capital’s recent strategic realignment has helped to mitigate this volatility, the fall in mark-to-market valuations of the company’s holdings resulted in it reporting a net loss for the second quarter,” said Waleed Al Muhairi, chairman of Waha Capital.

In the April to June period, the company’s total revenue was Dh28.69m, compared with Dh33.57m in the same quarter the prior year.

Despite adverse macroeconomic conditions, the public markets business, which manages emerging market credit and equity funds, reported investment gains and a fee income of Dh152m for the first half of 2022, the statement said.

The company's private investments business recorded a net income of Dh92m, as it continued to deploy capital through its Global Opportunities portfolio. Waha Land generated an income of Dh25m in the first half of the year, the company said.

“In the second quarter of 2022, we have navigated a challenging economic environment characterised by surging inflation, interest rate hikes, and ongoing geopolitical tension,” said Ahmed Al Mehairi, chief executive of Waha Capital.

Despite market conditions and macroeconomic challenges, the company said its public market funds continued to outperform their respective reference indexes.

The Waha Mena Equity Fund yielded a total return of 7.8 per cent in the first half of the year, compared with 0.4 per cent for the reference S&P Pan Arab Composite Index.

The Waha CEEMEA Credit Fund returned minus 5.8 per cent in the first six months of 2022 amid turbulence in global fixed income markets, significantly outperforming the minus 26.4 per cent return by the reference JP Morgan CEEMEA CEMB Index.

Similarly, the Waha Islamic Income Fund returned minus 0.51 per cent in the first half of the year, compared to minus 7.96 per cent for the reference Dow Jones Sukuk Index, the company said.

“The active management of our public markets funds into a more defensive position has enabled them to outperform their respective benchmarks in 2022,” said Mr Ahmed said.

Waha Capital’s total assets under management stood at Dh6.3 billion at the end of June 2022, an increase of 8.6 per cent from Dh5.8bn at the end of 2021.