'International expansion is a must for GCC tech companies' - investment banker Joshua Jahani
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‘International expansion is a must for GCC tech companies’ – investment banker Joshua Jahani

‘International expansion is a must for GCC tech companies’ – investment banker Joshua Jahani

Joshua Jahani, managing director of investment firm Jahani and Associates (J&A), reveals why his firm is growing in the GCC

Gulf Business

Tell us more about Jahani and Associates and your operations in the Middle East

Jahani and Associates (J&A) is an investment bank headquartered in New York City with operations in Dubai, Abu Dhabi and Singapore. We serve clients all over the world, including the GCC, North America and Southeast Asia. We are industry agnostic; we represent the buy side and the sell side. Our expertise includes M&A, capital placement, joint ventures and global trade. Most of our transactions are cross-border.

Our core mandate, and part of why Saeed Al Darmaki joined J&A’s board, is that our transactions focus on bringing technology to the GCC and developing the region’s economy. We accomplish this through investments, joint ventures and other investment banking and global trade frameworks.

We also own a coffee trading business. The principals of J&A own coffee farms in Honduras, and we sell that coffee throughout the world. Our coffee is sold in most MENA countries and parts of Europe and Southeast Asia.

A focus for your company is M&A. In the current scenario, what is your outlook on the M&A business in this region?

Our M&A outlook for the GCC is very positive. We have seen an increase in cross border M&A among the GCC countries, North America and Southeast Asia. Since the pandemic has shaped and will continue to shape markets worldwide, we expect to see sustained activity in ‘pandemic-resilient’ industries such as e-commerce, agtech, and technology in general.

We expect fintech will struggle as banks grapple with the realities of slowed commerce and less predictable cash flows.

Additionally, we expect to see a complete reshaping and consolidation of the hospitality industry, which will impact the GCC particularly.

IPO issuance fell 40 per cent in the MENA region in 2020, according to EY. Do you expect a rebound this year?

I am bullish on the private equity activity and middle market in the MENA region, particularly as it relates to cross border transactions.

However, I am not bullish on the IPO market in the MENA region. Most of the exchanges in MENA are too specialised to be applicable for the diverse set of companies that exist in the region.

We have several buy-side mandates now that are seeking acquisitions in the GCC to create a launching pad to the rest of the world. MENA businesses possess a unique strategic advantage from their central global location alone. They are connected to every part of the world.

Middle market companies that are successful in the MENA region are worth a premium to international buyers, and we are actively seeing the market value that now.

Technology has become integral to driving regional economies. Do you see growing activity in that space?

Yes. I do. MENA technology companies are growing quickly. Many of them are our clients and I am continually impressed with how these GCC founders are able to carve out competitive advantages for their technology businesses. I am also impressed with how technology business leaders in the region are building large and successful organisations without the need to burn significant capital.

We are familiar with the region’s leading technology investors and some of their portfolio companies are achieving significant growth and benchmarks that rival our clients in Silicon Valley. We see a lot of opportunity for exits from the region as well.

Looking at financing solutions, what kind of offerings do you have for regional clients?

Our clients hire us because they want access to cross border capital markets. If they are a family-owned business in Abu Dhabi, a technology company in NYC, or a trading group in Singapore, they hire us for our strategic advice and international platform.

In addition, because we focus on global trade, our clients benefit from the commercial opportunities we structure, negotiate and close with them. We have clients in almost every country within North America, the GCC and Southeast Asia, as well as many in Latin America, Europe and other parts of the world.

Our transactions are diverse and can be linked across any kind of instruments such as debt, equity, derivatives, or convertibles. Our commercial deals are also diverse including joint ventures, distributorships, traditional sales and many other structures.

Another facet of your regional business is the sale of coffee from Honduras through your trading company in the UAE. How were operations last year and what are your expectations for the future?

In 2020 we grew our coffee business and we were profitable.

We expect more growth in 2021 as local roasteries begin carrying more of our products. Because we strictly sell high-quality, high-altitude, single-origin Honduran coffee, our customers are connoisseurs and benefit from the quality of product we offer.

Looking ahead, when do you anticipate regional economies to recover from the Covid crisis?

I am very optimistic for the GCC and proud to have a business here. I expect Saudi Arabia will recover first and recover best. The other GCC countries are smaller and will likely be able to rebound with Saudi Arabia and the global economy.

While the UAE has a unique challenge due to its dependence on the hospitality, tourism and exhibitions industries, it also benefits from tremendous government leadership across all levels. I am optimistic and confident about its speedy recovery.

Overall, I expect it will be a multi-year effort to recover, much like for other parts of the world.

Lastly, what are your long-terms plans in the region? Are you looking at further expansion in the GCC?

Our vision for the GCC is simple. We will continue to do what is best for the region by leveraging our expertise in cross border transactions and providing our clients with the most innovative and valuable strategic advice possible. We will continue to be very technology focused.

I expect we will hire additional talent in the region, continue to open offices in Riyadh and Jeddah, deepen our existing relationships and make new ones with important stakeholders.

The GCC will continue to be a cornerstone for our firm.

For more information, visit: https://jahaniandassociates.com/

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