Abu Dhabi-based Eshraq Investments on Wednesday outlined a new strategy where the investment company will build direct private equity capabilities and exposure as it looks to transition away from its legacy portfolio.

Eshraq intends to focus on directly held private equity investments, complemented by cash generation from minority equity positions, fixed income assets and real estate to balance the portfolio and support consistency in earnings.

The ADX-listed Eshraq, which acquired the Goldilocks Fund in 2022, widened net loss to AED 306.1 million ($83.3 million) in Q1 2024 from AED 34.1 million in the year-ago period. The loss was largely due to the change in the value of the Goldilocks Fund, which fell by AED 400 million. Its share price has fallen 33% year-to-date to AED 0.30, according to LSEG data.

In recent months, the company has been trying to optimise its portfolio with the sale of real estate assets and attempts to monetise land banks.

Eshraq’s total liabilities in Q1 reduced 2% year-on-year to AED 160.9 million, as it continued to deleverage its balance sheet, mainly driven by reduced borrowings.

As part of its transition to a direct investment model, "Eshraq will prepare and execute transition plans for legacy assets, including properties within its existing Real Estate portfolio, and the Goldilocks Fund, currently managed by SHUAA GMC Limited," the company said in a statement.

Eshraq plans to hire fresh talent, including senior professionals to improve identifying and vetting opportunities for investment as the new strategy is expected to be executed immediately.

Abu Dhabi Financial Group is the top shareholder in Eshraq with 18% stake, according to LSEG data.

(Reporting by Brinda Darasha; editing by Seban Scaria)