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Curtains Up on Investment

Curtains Up on Investment

Investment floodgates for GCC firms have been flung wide open after Coca-Cola and Carlyle Group entered the ring, but are family businesses ready to accept it?

April 4, 2012 3:13 by

“Who says a family business is in¬evitably destined to fail? On the con¬trary, success is very attainable. Family businesses own a treasure of embedded attributes not found at other corporate structures. Family values, name and her¬itage are of the greatest importance in the Middle East and everyone wants to leave the family legacy better than (s) he found (or founded) it. Whether the plan is to go public, bring in new investors or it is only a matter of succession planning, address¬ing the risks and fixing the problems is key. It is never a trade-off between the family and the business,” said Salha.

AT Kearney in its recent report on GCC family businesses highlights several strengths of family-owned firms to give in¬sight to the foreign investors. It said GCC’s leadership has helped many family busi¬nesses excel in fast-growing markets. The businesses have abundant liquidity that allows them to be flexible. As the family businesses, traditionally, are deep-rooted in culture, they have intimate knowledge of their markets of operation.

Due to their strong fundamentals, the GCC businesses are not only attracting capital from abroad but are investing in foreign lands as well. Over the next dec¬ade, the GCC countries, underpinned by record high oil revenues, are planning 1,638 major projects worth more than $968 billion across various sectors, Ku¬wait Financial Centre, or Markaz, said.
More than 80 per cent of these projects are construction, infrastructure and petro¬leum industry related projects, the report said. “The continued buoyancy of oil pric¬es has allowed the
GCC states to maintain their commitment towards continued in¬vestment in projects for growth and devel¬opment,” it added. So it’s two way traffic in reality, and not just hypothetically.

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