UAE financial advisors seized opportunity in global crisis

One of the more memorable lines to come out of the global financial disaster in 2009 came from an American pundit: “Never let a serious crisis go to waste.”

Hamad Al Mutawaa has obviously taken that advice to heart. He was at the centre of Dubai’s very own crisis, as part of the management team of Dubai Holding’s property division.

At the time, there was a plan to merge that debt-laden business with the much healthier Emaar. In the course of negotiations, Mr Al Mutawaa was introduced to Chris Flinos, then an executive at the US investment bank Merrill Lynch, which was advising on the ultimately aborted deal.

“We’ve been friends ever since,” says Mr Al Mutawaa. Their friendship was the start of a business relationship that could add a new and distinct voice to the UAE banking scene.

CH Stirling was launched early last year, the title consisting of the men’s initials plus a brand name. “We wanted something that would stand the test of time, and that was majlis-friendly,” explains Mr Al Mutawaa.

He goes on: “Anybody who worked in investment banking during the crisis had dreams of starting their own firm. But to do so, you had first to answer the question: are the clients here because of me or because of the bank? What was missing was a connection to the local market.”

Mr Al Mutawaa is a member of one of the big merchant families of Abu Dhabi, and already had a client, another big local conglomerate that was in the midst of a quite complex restructuring. (He does not disclose the names of clients because so far they have all been private companies.) That meant the firm was funded – from client fees and personal capital investment – from the beginning.

“So we are fortunate in that we can be selective in our approach to transactions. We aren’t brokers or middlemen or walking around the DIFC trying to position ourselves. Our long-term plan is clear: we want to become the region’s leading locally based investment banking advisory firm. We have the clarity to be able to stick to our vision free from any interference. We don’t want to run funds, push products or need a financial sponsor, and this will help ensure we grow our brand equity while we grow our business,” he says.

That sounds like a pretty clear and unique strategy, yet there are already a number of much bigger and older banks operating in the region that offer advisory services, institutions such as Lazard, Rothschild and Moelis & Co. They, and a range of even more specialist advisers based in DIFC, are not going to let CH Stirling have its own way in this lucrative market.

“Our advantage is that we are locally based, and serve the local market from their perspective. In five years’ time, we want to challenge our competitors in our market. And we are clear on how to do that. Many international advisers in the region don’t dedicate the time to the Middle East. We understand it and care for it, ” says Mr Al Mutawaa. CH Stirling is registered in Abu Dhabi, Mr Mutawaa’s hometown, but with offices in Dubai Media City as well.

How does the strategy work in practice?

“For example, the client might come to us and say, ‘We want to IPO or do a fund.’ Our first response is generally: why do you want to do that?” says Mr Al Mutawaa.

“The clients really respect that. There is no conflict between your interests and ours, we do not have a balance sheet we’re trying to use, we are not lending to you and we are not selling you a product. If between Stirling and our clients we agree that an IPO is appropriate, we will be the adviser to the client, not the book runner. It ends the schism between investment banks and clients,” he says.

Where will the business come from? “Our first few clients have been pretty similar – Abu Dhabi based, family offices, medium to big in size. Until we came along, they’d been served by banks, who inevitably tell the clients they need to borrow more money, and relied on accountants for advice.”

He is sceptical about the rush to stock offerings by many of the older businesses in the Gulf: “Family businesses don’t have to go public to modernise. The family company has been a tried and tested model in the region. Family offices and Fortune 500 are not mutually exclusive. We understand that they have family interests and children to take care of. Many family businesses are huge, but their finance teams have been around 15 years or more. We want to help make them more appropriate for the modern era,” he says.

His background, and that of Mr Flinos, gives the firm expertise in property and the hotels and leisure industry – important parts of the UAE economy. They also have experience in other sectors, such as industrial, oil and gas and food security.

The aim now is to grow the business. They have added an analytics service, providing capital market intelligence to client executives, and also aim to increase the offering in investor relations advisory, a coming thing in UAE finance.

“In five years’ time, we want to be challenging competitors like Rothschild and Lazard, and we are clear how we’ll do that,” says Mr Mutawaa./