Company Profiles

Investment Consultant's Big MENA Ambitions

Tom Burroughes Group Editor 15 April 2024

Investment Consultant's Big MENA Ambitions

After opening a new office in Dubai, this news service talked to the local head about the Gulf, the wider Middle East and North Africa region, and the opportunities he sees in the wealth and banking sectors.

Last month, the independent investment consulting firm, bfinance set up an office in Dubai to support and grow its Middle East and Africa client base. The man leading this office hopes the region – accounting for about 20 per cent of total business revenue – could rise to as much as 30 per cent in future.

A decade ago, that share was closer to 10 per cent. 

Helping to drive this pace of growth is part of the job description of Alex Denby, managing director and Dubai office head, who joined the firm 12 years ago.

He explained to this news service that the business wanted to be physically closer to clients.

“A lot of people are moving to the region. It is having its moment,” Denby told this news service. “Saudi Arabia is where we are seeing the most activity.”

At present, under 10 per cent of clients in the Middle East are family offices; about 20 per cent of clients in the region are wealth managers. There’s plenty of upside potential from that, Denby said.

The firm, founded in 1999, operates in the same space as businesses such as Cambridge Associates, Towers Watson, and Mercer. Denby said a key differentiator for bfinance is that it doesn’t directly manage money and focuses purely on advisory services for institutional investors. In 2023, the firm had a management buyout involving a purchase of a 51 per cent stake formerly held by Baird Capital. (That transaction was supported by Beach Point Capital Management.) Following the MBO, chief executive officer David Vafai is leading bfinance.

bfinance’s revenue model is to charge fund managers that win business on a one-off fixed basis point fee that is pre-agreed with the client and charged against the funds committed. This way, bfinance is paid the same regardless of which manager a client picks. “For managers, this [bfinance] is another distribution channel for them,” he said.

In five years’ time, Denby said he hopes that bfinance will have a “significant” presence in the Gulf and become more of a “household name.”

“Now we really have an opportunity to get our name and brand out there,” he said.

“Our core business is manager search and selection,” Denby continued. The firm helps clients find bespoke expertise across the whole range of asset classes, both traditional – such as listed stocks – and private – such as private credit and venture capital.

The firm avoids giving clients a pre-cooked set of recommended solutions or “buy-list,” instead preferring a tailor-made approach starting afresh with each client to help them design their mandate and then find a bespoke solution. To handle the workload, bfinance has developed a proprietary software platform called the IMP (investment management platform) which is able to handle a large number of tenders from asset managers in a short period of time.

“We can track how managers are interacting with client mandates in real time,” Denby said, saying the total time in making a request for a proposal to a final recommended solution can take as little as four weeks, though a review of the full universe of managers typically takes 10 to 12 weeks. 

What do clients want?

“In the last 12 to 18 months, and in the Middle East, there has been a lot of interest again in equities. The drawdown happened in 2022 and in 2023…clients are starting to look at reshaping portfolios,” he said.

A big theme includes private market investing – credit and equity – and an interest in Shariah-compliant investments is important.

Denby doesn’t think that risk appetite in the Middle East/Africa has risen, however. “There’s continued focus on further diversification,” he said.

The new Middle Eastern branch marks the firm’s 11th location with other offices in London, Sydney, Hong Kong, Toronto, Montréal, Chicago, Rome, Paris, Amsterdam and Munich. 

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