Bahrain sovereign fund no longer looking to invest in SoftBank fund

Bahrain’s sovereign wealth fund Mumtalakat is no longer looking to invest in SoftBank Group’s Vision Fund, its chief executive told Reuters on Tuesday.

Vision Fund, the Japanese group’s mammoth $100bn private equity fund, targets the technology sector and has attracted investment from other Gulf state funds such as Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala over the past few years.

Mumtalakat had been in early talks to invest in Vision Fund, but “at the time being it doesn’t look like we’ll invest (in it),” Mahmood Alkooheji said in an interview.

“We talked with them and with many people, but it shows we’ve not seen something we think we can add value to or it could add value to us.”

Mumtalakat, which holds the Bahrain state’s stakes in companies including Aluminium Bahrain (Alba) and telecoms company Batelco, has a portfolio valued at over $10bn.

It is looking at investment opportunities in areas such as education and healthcare, where it sees potential for growth in Bahrain and in the Gulf region, Alkooheji said.

“Saudi is one of the most interesting economies in the region but Bahrain is always our soft spot, we find it much easier to do investment in Bahrain because we are the block of the neighbourhood, we can get our way,” he said.

Bahrain, one of the Gulf’s financially weakest economies, last year obtained $10 billion in pledged assistance from its neighbour and ally Saudi Arabia, as well as Kuwait and the United Arab Emirates, after experiencing severe pressure in currency and debt markets on the risk of an impending credit crunch.

The financial aid is linked to a series of fiscal reforms which include the introduction of a value-added tax and the removal of subsidies.

Alkooheji said the fund is looking at opportunities to invest more in renewable energy.

“Because of adjustments that the government made such as removing subsidies, really putting more commercial pricing to fuel and electricity, renewable became far more interesting.”

Bahrain announced last year a large new oil and gas discovery off its coast estimated to contain at least 80 billion barrels of tight oil.

The kingdom’s biggest ever find has the potential to significantly boost its revenues, though it is not yet clear how much of the estimated reserves are recoverable.

Mumtalakat has not directly invested in oil exploration, but it has increased its exposure to the oil services industry, said Alkooheji.

Last year it invested an additional $50 million in Arab Shipbuilding and Repair Yard, a Bahraini company specializing in ship repair.

“Part of our choice depended on the oil discovery,” he said.