[EXCLUSIVE] Interview with Adel Alateeq, the CEO of Saudi Arabia's Public Investment Fund's (PIF) Fund of Funds, Jada
Following the launch of the $1.07 billion fund of funds ‘Jada’ by Saudi's PIF, MAGNiTT exclusively interviews Jada CEO, Adel Alateeq to learn more about the Fund's objectives and vision for the future:
Philip Bahoshy: What sparked the mandate to create a fund of funds in KSA?
Adel Alateeq: Private businesses, particularly small and medium businesses need active Institutional Capital that does not only provide needed equity capital, but more importantly institutional strategic and operational guidance and support. Active Institutional Capital is best represented by Private Equity Investment Managers. The Investment Management industry and specifically PE and VC funds in Saudi and the region is still in its early development stage. The lack of institutional limited partners in this space is also noticeable.
Historically Saudi investors have not been exposed to blind pool funds in the region. They might have been internationally, but from what we have experienced, single asset funds are more common in the region. Having institutional capital in PE/VC funds should empower Investment Managers and allow them to primarily focus on driving value to startups and SMEs with a dedicated experienced team, instead of creating single asset funds and thinking of fund raising from one fund to the other. Jada has been created to help investment Managers ease fund raising by being the anchor institutional investor that would help entice other institutional investors, in order for Investment Managers to focus on driving value and spearheading the drive in uplifting and creating a flourishing ecosystem.
Philip Bahoshy: What is the focus of the fund? Is it to spur regional investment or KSA based startup investment?
Adel Alateeq: Jada’s main mandate is to invest in Saudi or Saudi focused Private Equity and Venture Capital Funds. Those Funds will invest in SMEs to create value and drive growth.
Philip Bahoshy: As we discussed, investor education is key. How do you look to bring in best practices to ksa and support GPS while encouraging more family offices and LPs to participate?
Adel Alateeq: Well there are two tracks to tackling this issue. The first, is through our investment and the second is through programs we intend to create targeting first time GPs and LPs. When we invest, we make sure the fund's structures and documentation adhere to international best practices. One area we focus heavily on is increasing trust in the investment team. This is usually achieved through empowering the investment team by making them responsible and accountable for the investment decision process and then aligning their interests with the investors interests.
On the other hand, the role of the investors should be limited to ensuring that investors managers are at all-time compliant to their mandate and to deal with conflict of interest matters. We hope to be successful at doing that in order to be able to attract other LPs to the asset class. On the other issue, the programs, we are aiming to create an Emerging Manager Program that will provide support to first time and emerging managers which will include training, mentoring and other community development activities.
Philip Bahoshy: How quick do you look to deploy the fund and will this be staggered?
Adel Alateeq: How quick we deploy capital will depend on the market readiness. We would like to deploy the right amount to the right managers at the right time. We would like to jump start the ecosystem but we are very cautious not to inject excess capital that might lead to imprudent investment practices.
Philip Bahoshy: Have any of the funds already been deployed?
Adel Alateeq: Jada has invested in 7 Funds so far, and most of them have started deploying capital. Although our mandate is challenging, yet there are encouraging early signs that we have witnessed so far. There is a lot of interest in VC and we have seen some successes. We also hope to see similar interest in PE too and we hope the success of the few PE investment managers we are going to invest with will help increase that interest.
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