Gulf trip: Day Four

Abu Dhabi / Kuwait

It was a bright and beautiful morning. The Intercontinental Hotel in Abu Dhabi has a great water vista, with a modest marina and a quiet pool for those with more time on their hands than Sunil and I did. Off in the distance, huge billboards rise out of a man-made island. Paintings of the line of Abu Dhabi Shiekhs I assume.

Imagine driving down Lakeshore Boulevard and seeing a 30 foot high painting of Steven Harper (or Stephane Dion) on the seawall. You get the picture.

After a recee at the Embassy, we headed off.

The first meeting is with one of the great funds in the world, with a long history of investing globally – both in funds and companies directly. The place is so busy that their lobby reminds me of the Porter Longue at the Toronto City Centre Airport. This is where all guests wait until their hosts are ready to receive them at one of the floors upstairs. Milling about in this centralized facility are businessmen from Japan, England, France, etc. One has a clear plastic bag of bound powerpoints thrown over his shoulder, like the weekly drycleaning. You know he’s selling something.

TVs running the BBC are mounted on the walls around the lounge, and you can help yourself to large, individually wrapped dates that sit in what would pass for martini glasses throughout the room. A “concierge” takes us up to the meeting room, and another staffer immediately arrives to ask us if we’d like water, coffee or tea. Occasionally a Latte is offered. Without fail, you will be offered something to drink at each and every meeting in the UAE. (Keep an eye out for the lavatories as you are leaving if you are doing four or five sessions a day.)

The robed gentlemen who met with us was extremely knowledgeable about the North American private equity and venture capital market. He was gracious, smart, engaging, and interested in determining what was going on “out there” that he hadn’t already heard from one of his many other industry sources. We actually knew some of the same people. With at least 10 years in the firm, he is practically a grey beard. Most of the professionals that you’ll come across in various firms and funds have been in the UAE for, at most, six years. The majority have been here less than two.

Sunil and I quickly determined that this man knew the North American market as well as any institutional investor could who wasn’t based on our side of the pond. And even then…. Fantastic.

He is interested in learning about where no one else is playing, rather than fall into the easy trap of “buying IBM” (my words) to please his bosses and sit back and let his investments run on autopilot. A most pleasant bit of insight. He’s interested in playing where the industry isn’t. If everyone is going one way, he’s wondering about the other. What’s going on in biotech? Everyone’s left it for dead; that might make it worth a look. A wonderfully refreshing mentality.

He had just returned from a trip to North America. Wanted to check in on some of his GPs. Make sure that the teams were still intact, and take the pulse of the portfolio companies. He gets nervous when good partners start to leak, whatever the reason. He isn’t against backing them in their new venture, but you need to understand what’s happening before you find yourself stuck with an empty vessel.

We could have been in California or Montreal, the conversation was so familiar. We knew people in common, and the hour flew right by. As meetings go, it was fabulous. Great guy, and a reason to return next year.

The second meeting took place with a different group at the same firm, and was designed to give us some insights to the players in the market, and what Canadians can be doing to improve the financial links between our two countries. Different team, different focus, same professionalism. These folks have had the luxury of hiring some of the best in the world for the various ranks. 12 jobs to fill? 1,200 resumes to choose from. Harvard isn’t that tough or lucky.

It is clear that this team is still in business, despite the markets, and looking to do deals around the world. The problem is, or course, that many of their natural syndicate partners aren’t sure which end is up right now. Whether it be the lack of available debt for new deals, or the cascading public markets. There are few doors to knock on if you want to syndicate a massive deal. Nice problem to have you might think, but not doing deals is no fun, whatever snack bracket you’re in.

We had the chance to eat chow with the titans at the corporate lunch counter. It wasn’t clear if guests were permitted, so we tried our best to fit into the woodwork. Canadians are in all sorts of jobs here as well. No one is quite sure why, or where they came from last, but our Nation has done a good job of exporting or finance talent to Abu Dhabi.

Many of the large Canadian pension funds are well known here, and some Canadian banks are spending a bit of time in the region. One just finished a mission, and another held a successful multi-day conference. Each are wise to be doing what they are doing.

Our third meeting was with an “investment company”. Think Onex or Clairvest but without a public listing. About 300 different investors have pooled their capital into a common share company, and the play is to take it public someday. The local stock markets have been no better than in the rest of the world, so that plan is on hold. The firm is interested in investing in a variety of sectors, such as Clean tech, Education, IT services, etc., but all of their capital is to go into Abu Dhabi-based investments.

As the conversation went along, I quickly learned that at least one of our portfolio companies was already doing something that his firm wanted to expand into locally. “Send me the information”. Time well spent.

The last meeting was with another institution that specializes in the Innovation Economy. They have plenty of capital, as in more than US$10B, and are looking for the firms that are the best in the world at what they do: big or small, but they have to have a direct relevance to the UAE. Clean Tech, Alternative Energy, Smart Grid, are some of the interests, but Solar and Wind aren’t two of them. Wind Energy can’t really be used in the UAE, and the dust and slight haze defeat all of the benefits that 360 days of sunshine would mean for a solar solution. At least with the current known technologies.

One of the two professionals was a trained engineer from India, and the other was from, you guessed it, Canada. Again, very hospitable, gracious, focused on what they are looking for, and very interested to heard about specific Canadian technologies or companies that might fit their strike zone. It was a great meeting for a variety of reasons, not the least of which was that it confirmed the initial premise of the trip: the firms of the UAE are interested in talking about specific opportunities for proven technologies. Canadian firms are welcome.

There’s no time for start-ups here. They have a nation to build.

After the meeting, Sunil and I then parted ways. He went back to Dubai for the international DIFC Conference, and I was headed for a day in Kuwait.

Upon arrival at the Kuwait airport, the first store to my left was a Starbucks. Speaking of the omnipresence of the U.S.A. in the region….

The hotels of the Gulf all want to pick you up when you arrive, and I can’t tell you how more comfortable you feel when you arrive in a country for the first time and someone is expecting you.

But to get into Kuwait, you need a Visa. Which means you need to have been invited by someone in Kuwait to be able to acquire one in the first place. The Visa process isn’t painful from their, but I realized that I don’t think I’ve ever been somewhere in my life where a Visa was required. Japan, Thailand, Hong Kong, five countries in Europe, now the UAE. All of which had made arrangements with our Government to get us Canadians in without prior approval. Interesting. Someone in Ottawa should fix that.

As a city, it is definitely quieter than either Dubai or Abu Dhabi. With only 1 million residents, Kuwait City still relies on roundabouts for many of its intersections. In Abu Dhabi, they plowed them over to install stop lights. But in Kuwait City, you feel like you are in Britain or rural France. Except for the close proximity of the Persian Gulf out your passenger window, that is. And nothing is green. Other than that.

MRM