Monday, Mar 28, 2011
(This item was originally published Sunday.)
By Mirna Sleiman
Of ZAWYA DOW JONES
DUBAl (Zawya Dow Jones)--Mashreq Capital, the investment arm of Dubai bourse-listed Mashreq Bank, plans to double its fixed-income assets under management to $300 million by year-end as investors eye stable returns away from volatile equity markets hit by regional political turmoil, the lender's top executive said Sunday.
"We currently manage $150 million on the fixed income side. That includes three funds and some discretionary money," Abdulkadir Hussain, Mashreq Capital's chief executive officer, told Zawya Dow Jones in an interview in Dubai.
"We will not launch new funds but should be able to double that size by the end of this year," Hussain said.
Mashreq Bank merged its fixed-income and equity asset management units under Mashreq Capital last June, bringing the total value of assets under management, or AUM, to $450 million. Mashreq Capital manages the Makaseb Income, Emerging Markets Credit Opportunities and Mashreq Al Islami Income funds on the fixed-income side.
"You'll get a nice 6-8% return this year on fixed income. Even if spreads tighten you'll still get the guaranteed coupon payment," Hussain said.
The fixed-income market has been under-allocated during the past years in comparison to initial public offerings, real estate and stocks, he added. But more fund allocations are expected in the fixed-income market after it saw double-digit returns in 2009 and 2010 in light of volatility in equity markets.
Mashreq Capital will target pension funds, sovereign wealth funds, treasuries of corporates and high-net-worth individuals in the Middle East region, Hussain said.
"We find secondary valuations cheap in Dubai. In other markets, we mainly target new issues that promise higher returns," he said.
Hussain said he expects a good flow of bonds during the coming two to three months in the U.A.E., including issues from Dubai Electricity and Water Authority, Dubai Aluminium, Dana Gas and the Dubai government.
-By Mirna Sleiman, Dow Jones Newswires; +9714 446-1698; mirna.sleiman@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
28-03-11 0345GMT
