Earnings Presentation H1 2018 Asset Management | Investment Banking - PowerPoint PPT Presentation

Kuwait Financial Centre K.P.S.C. "Markaz" (Boursa Kuwait: MARKAZ) Earnings Presentation H1 2018 Asset Management | Investment Banking

Discussion Agenda Markaz Overview …………...................… 3 H1 2018 Performance Highlights ……..… 6 Management Discussion ………..….….… 9 Shareholder Information ……………….… 17 2

Markaz Overview One of the leading financial institutions in the region delivering consistent shareholder returns Leading market position Sustainable long-term shareholder Building a sustainable economy in Our Team - cornerstone of our success As one of the region’s leading asset returns Kuwait A team of 150+ employees spread over management and investment banking firm, Generates sustainable long-term returns Endeavors to actively participate in offices across Middle East, US and India Markaz offers custom investment solutions driven by robust operations and consistent community service and contribute to with exceptional track record dividend payouts building a sustainable economy in Kuwait  Established in 1974 and listed on Boursa Kuwait in 1997, is an asset management and investment banking institution  Consistently outperformed the relevant benchmarks on its equity funds and managed portfolios  Real estate investments across MENA and International, with a key focus on income generating assets  Efficiently delivering MENA focused research reports, and consulting through its research subsidiary – Marmore At Markaz, our reputation is our biggest asset. We have been voluntarily operating under strict guidelines long before corporate governance was the norm 3

International Investment Reach Germany US Kuwait Qatar Bahrain Oman KSA India UAE Egypt Lebanon Jordan Equity Funds Fixed Income MENA Real Estate Investments International Real Estate Investment Banking Advisory Offices 4

Accreditation and Awards One of the most recognized and well awarded brands across the MENA region Best Asset Manager Best Investment Bank Best Investment Bank in in Kuwait Kuwait By: EMEA Finance By: Global Finance By: Global Finance Best Investment Bank Best Equity Fund in Kuwait Best Islamic Fund “Mumtaz” By: Euromoney Awards By: MENA Fund Manager Awards By: Zawya Awards 5

H1 2018 Performance Highlights 3 Mar-Gulf managed funds and our core real estate portfolio. Mar-Gulf, currently Commenting on the performance, Mr. Manaf A. Alhajeri, manages 7 ongoing projects in the United States and a project in Germany and Chief Executive Officer of Markaz said: Markaz continues to evaluate opportunities in high-growth and supply constrained “ Markaz continues to drive each of its business divisions metros. successfully delivering an overall 13.7% increase in H1 2018 revenues. We continue to build our asset During the first half, Markaz successfully completed several advisory mandates. management business with an AUM increase of 6.3% on a Flagship assignments year-to-date included the acquisition of 29.5% of HEISCO y-o-y basis. Meanwhile, our income on principal on behalf of clients, the acquisition of 23.3% of ACICO construction on behalf of investments delivered revenues of KD 4.51 million. On an clients, a debt settlement for an Emirati bank, and two ongoing high-profile annualized basis, H1 2018 income returns on principal restructuring transactions. In addition, Markaz successfully completed a KD 20 investments were 6.3%. Our asset management fees increased to KD 3.44 million million capital increase of United Projects Company for Aviation Services (UPAC). up and investment banking fees reached KD 0.82 million. Markaz has a long standing investment banking track record of providing high quality independent advice coupled with outstanding execution. We continue to GCC stock markets witnessed an uptrend during H1 with YTD returns of 9.9% as build on our reputation as a leading regional investment bank servicing not only evident of S&P GCC index. As one of the leading asset managers in the region, corporates within MENA but also multinationals operating across borders. Total Markaz is well positioned to benefit from the healthy performance of the region’s transaction value executed by Markaz up to June 2018 amounts to KD 1.24 billion. markets. Our asset management offerings include diverse proprietary and customized investment solutions, and aim to deliver long-term value creation for our investors, and our investment decision-making process is backed by extensive H1 2018 vs. H1 2017 ( KD million) qualitative and quantitative analysis, and stringent risk management guidelines. This is reflected in our funds’ sustainable performance through the years and across Total Revenue Management Fees different economic cycles. KD 8.77 mn KD 4.26 mn Growth: 13.7% Growth: 34.3% In the first half of 2018 Markaz Proprietary portfolio have beaten its strategic index by 151 basis points. International markets are preparing for ongoing interest rate Net Profit* LTM Return on increases that are being implemented by many central banks of major economies. KD 2.62 mn Although this clearly has some implications, primarily for our asset management Equity of 4.5% Margin: 29.9% business, Markaz is fully prepared to be responsive in these dynamic financial markets. Total Assets Under Management KD 1.02 billion International real estate AUM increased by 18% during the quarter as the US real estate markets continue to strengthen. Our US-based subsidiary, Mar-Gulf, successfully exited three real estate development projects during the first half, with a Total Debt / Total Equity of 0.4x total value of USD 67.10 million. The exited projects included a self-storage project 2017 Cash dividend of 7.0 Fils per share in Los Angeles California, industrial projects in Phoenix, Arizona and another industrial project in Dallas, Texas. This performance was spread across our *Net Profit attributable to parent company excluding non-controlling interest 6

Business Highlights Total Assets Under Management of KD 1.02 billion, an increase of 6.3% from June 2017 Asset Management Real Estate Investments GCC Equity Funds, Fixed Income Fund, Others Middle East and North Africa, International Total AUM of KD 689 million Total AUM KD 331 million  Asset management continues to implement Markaz’s long term bottom MENA Real Estate  Managing part of the National Real Estate Portfolio with a value up to KD up investment approach along with active liquidity management 250 million  GCC Equities AUM declined by 4.1% to KD 599.17 million, with positive  9 income generating and 3 development properties across Kuwait, KSA results being offset by net outflows and UAE  Continued difficult market conditions across the GCC impacting  The Fixed Income fund remained flat during the quarter despite transaction volumes and values  Markaz Real Estate fund with AUM of KD 81 million across 18 properties negative market conditions and outperformed index performance. The Fund continue to focus on lower duration and higher quality credit investments National Real Estate Portfolio – 12 Properties - Real Estate Fund International Real Estate MIDAF - MUMTAZ - Forsa Financial - Arabian - Islamic Fund - Markaz Fixed Income -  7 ongoing US based projects managed through the Mar-Gulf subsidiary. Private Portfolios - Oil & Gas / PE  1 Europe based on going project.  Two exits achieved during Q2 2018 and continued focus on development and value-add transactions in high-growth and supply constrained metros  Evaluating value-add and opportunistic deals in Europe US Distressed Debt Portfolio - US Development Portfolio VI - US Value Add Portfolio VII 7

Business Highlights Adding significant value to clients through high quality advisory services and research Investment Banking Research Mergers & Acquisitions, Advisory, Equity & Debt Capital Markets, IPOs Mena focused Research, Consulting Services  Total transaction value executed up to June 2018 of over KD 1.24  Publishes MENA focused research reports and bespoke consulting billion across the GCC market services for over a decade  Markaz investment banking team successfully executed and advised  Operates through Marmore, a subsidiary of Markaz on high profile transactions during H1 2018  Established in 2010, with offices in India and Kuwait  Flagship assignments year-to-date included the acquisition of 29.5% of  Marmore has partnered with several thought leaders and leading policy HEISCO on behalf of clients, the acquisition of 23.3% of ACICO research institutions to generate Economic & Policy Research studies construction on behalf of clients, a debt settlement for an Emirati bank, and two ongoing high-profile restructuring transactions  A successful completion of a KD 20 million capital increase of United Research Themes: Capital Markets, Industry, Policy, Economic, Infrastructure, Regulatory, Projects Company for Aviation Services (UPAC) Periodic Consulting Services Most Innovative Investment Best Investment Bank in Bank in the Middle East Kuwait 2011 , ‘ 12 , ‘ 14 , ‘ 15 , ‘ 16 , ‘ 17 2016 Best Investment Bank in Best Investment Bank in Kuwait Kuwait 2013 , ‘ 14 , ‘ 15 , ‘ 16 , ‘ 17 2013 , ‘ 14 8