GFH Financial Group, a Bahrain-based investment bank, is spinning off its infrastructure and property assets to develop a new firm focused on sustainable investments in the Gulf region and other worldwide markets.
According to GFH, the new business, Infracorp, will manage an asset portfolio worth around $3 billion, which includes land in the Gulf, North Africa, and South Asia.
“The formation of Infracorp was in response to the substantial need and potential for private sector investment in the building of sustainable infrastructure as global economies transition to becoming more egalitarian, socially and ecologically conscious,” GFH CEO Hisham Alrayes stated.
“Unprecedented levels of cash are required to both modernize and establish sustainable foundations, and Infracorp is ideally positioned to do this.”
GFH has a diverse investment portfolio that covers the Middle East, the United States, the United Kingdom, and Asia in industries such as health care, education, and logistics.
It partnered with Kuwait-based asset management firm Wafra International last month to purchase a portfolio of logistics assets in the United States.
According to Mr Alrayes, spinning out its infrastructure holdings will allow GFH to “concentrate more on financial assets while enabling Infracorp to manage and generate returns from infrastructure and real estate assets, which have a longer investment cycle than banking operations.”
“We believe the change will benefit GFH’s earnings and the soundness of our balance sheet.”
Over the following 24 months, the business intends to list Infracorp on a GCC market and issue green sukuk in order to generate further capital and create “even greater value and present a unique opportunity for investors.”
In the third quarter of 2021, GFH more than quadrupled its net profit on an annual basis, owing to excellent performance throughout the group’s business areas.
The bank’s net profit attributable to shareholders increased by 187.3 percent to $23.3 million in the three months to September 30, up from $8.1 million in the same period previous year.
Meanwhile, net profit for the first nine months of the year increased by more than 160 percent year on year to $60.3 million, thanks to significant increases in income and earnings.