Performance Review | Direct Investments
SEDCO Capital

SEDCO Capital, a wholly owned SEDCO subsidiary, was established in 2010 to extend asset management services to external clients. The firm also manages SEDCO Holding’s public equity and international real estate investment portfolios.

Samer Abu Aker
Chief Executive Officer

SEDCO Capital offers world-class asset management services in both advisory and discretionary portfolio management capacities. It helps investors access opportunities in local and international real estate, international private equities, MENA-based liquid assets and international public equities.

Most major asset classes posted negative results in 2018 as markets transitioned away from a low-volatility, mid-cycle environment to a late-cycle, high-volatility environment. The transition was driven by persistent concerns over global trade, slower economic growth and tighter monetary policy from central banks.

The SEDCO Capital international liquid assets team continued the optimization of core/satellite strategy for international liquid assets by discontinuing two regional active funds and launching a new global defensive equity strategy in 2018.

In 2018 Islamic indices generally outperformed conventional indices. SEDCO Capital’s ethical investment funds, outperformed their competitors and peers during the year.

SEDCO Capital REIT initial public offering

SEDCO Capital launched its initial public offering (IPO) for SEDCO Capital REIT, the Shariah-compliant real estate investment traded fund, raising more than SAR 600 million from 74,000 individuals and institutional investors. Subsequently, the firm signed a banking facilities agreement with Al Rajhi Bank worth SAR 600 million for the benefit of the fund, which will be used to maximize fund revenue targets and achieve its objectives.

Regional public equity

2018 built on the successes of 2017, a year when Assets Under Management increased by 466% on a YoY basis. Funds managed by the team recorded 116% growth while discretionary portfolios grew by 1,478%. Reporting standards were upgraded and automated in convergence with global best practice.

Private equity

The private equity team committed investor capital to new funds in Europe, North America and Asia during the year. Meanwhile, existing funds made annual distribution at a YTD realized multiple of over 2.3x, with an IRR of 18%. In 2018, the PE team committed to more funds than any previous year since inception.

The co-investments team executed 6 transactions globally in 2018, providing growth capital to fast-growing companies in consumer, healthcare, industrial and techenabled businesses. New investments included a leading gymnasium chain in China, a technology provider based in the UK, a leading physician services business in the US, a US-based compliance and regulatory solutions provider, and an online driver’s education platform in the US. A follow-on investment was made in a fast-growing South Korean sunglasses company.

Income Generating Private Investments

In 2018, SEDCO Capital continued building on its new Income Generating Private Investments (IGPI) asset class. The asset class complements existing alternative assets by delivering regular income streams.

As a pioneer of ecthical investment, SEDCO Capital has developed the IGPI framework and built a global partner network to execute the strategy effectively while staying true to its principles.

IGPIs offer investors a hedge against inflation and interest rate fluctuations with a strong set of downside protections. They improve overall portfolio diversification given their low correlation with other asset classes. Increased market volatility through 2018 made a compelling case for adding IGPIs to client portfolios.

2.3x

SEDCO’s funds made annual distributions at a realized multiple of over 2.3x, with an internal rate of return of 18%.

SEDCO Capital raised more than SAR 600 million from its initial public offering of SEDCO Capital REIT, an ethical investment real estate fund.
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