FTI Consulting has set its sights on an ambitious growth trajectory in the Middle East and Africa. In this interview, Vikas Papriwal, senior managing director, leader shares insights on how the company plans to grow its business in the region. He also adds his perspectives on green finance and opportunities for investors.
Economy Middle East: What prospects do you see for your business in the Middle East? What will be the key drivers of your growth in 2024?
Vikas Papriwal: We in FTI are excited to continue to grow side-by-side with the region and find new ways to work together to build value for the companies and communities here. I’m very enthusiastic about our global launch of FTI Delta strategy consulting business this October. We’ve enhanced our capabilities with FTI Delta to better deliver end to end transformation for our clients globally, and FTI Delta’s focus on telecommunications, media and technology (“TMT”) and public sector clients aligns with key growth sectors for the Middle East. In addition, we are especially well-positioned with our support for M&A, restructuring, cybersecurity, and strategic communications to meet some of the immediate needs of the region as it adapts to changing global macroeconomic conditions and manages the surge in foreign investment into the region.
Economy Middle East: FTI Consulting is a multi-faceted business – from consulting and corporate finance to strategic communications and forensic investigations – with revenues of over $3 billion. What’s the key to your success?
Vikas Papriwal: We’ve built FTI Consulting around some key core attributes: deep financial acumen, first-hand industry expertise, and intense focus on supporting and working alongside our clients during the moments of truth for them and their companies. People remain central to what we do. We are known to work more closely with our clients than many of our competitors, and our clients have told us that our ability to bring together the right people to collaborate on complex problems from across our global network leads to a better client experience for them and ultimately leads to delivering a strong outcomes and real value.
Economy Middle East: As head of corporate finance and restructuring, what do you consider to be the biggest challenges facing the corporate finance industry in the Middle East? What opportunities are on the horizon?
Vikas Papriwal: Many of the macroeconomic stresses experienced in other parts of the world have affected the Middle East later than other regions or have had a lesser impact. The Middle East has, for instance, felt less inflationary pressure than other parts of the world, and their economies have continued with strong growth and are now some of the fastest growing economies globally (with solid growth outside of our traditional petrochemical sector). The long-term plans that countries like Saudi Arabia, the UAE, Qatar and the wider GCC markets have put in place have guided their direction, opened up new areas for innovation and investment from sources within the region and outside it, and set key priorities that reinforce investor confidence.
In part because of that strength and the opportunities accompanying it, you see a strong influx of great talent into the Middle East. That talent feeds innovation, transformation, and diversification, which in turn leads to broader systemic changes, including regulatory changes to accelerate the growth of the business environment (like new bankruptcy codes) that further energize the region’s economies. Strong numbers around IPOs and startups, as well as increased foreign investment, further testify to the attractiveness of the opportunities in the region.
Of course, some companies and sectors, however, may struggle with the challenges these changes present as credit availability decreases and debt servicing costs increase. Some of the sectors may be more vulnerable to these macroeconomic pressures than others – retail, transport, and real estate, etc.
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Economy Middle East: Green finance has caught on in developed markets but has yet to make an impact in emerging markets, where the ill effects of climate change are mostly felt. What will it take for green finance to really make a difference?
Vikas Papriwal: The challenge is real for emerging markets – the IMF predicts that by 2030, private finance will need to cover approximately 80 percent of climate mitigation investment needs in emerging markets and developing economies to meet the Paris Agreement’s temperature and adaptation goals. A robust combination of government support, including incentives and regulations, public-private partnerships, and investment by financial institutions will be important to meet this challenge.
In terms of impact, GCC countries, most notably Saudi Arabia and the UAE, have shown the way with a multi-stakeholder approach to taking on a very real challenge that, especially in a region where oil and gas play such a big role, cannot be solved overnight. Efforts like the Middle East Green Initiative sponsored by Saudi Arabia, for instance, are part of concerted action across the region that saw the Gulf debt-market funding for climate-friendly projects exceeding that for fossil fuel companies for the first time in 2022. Sustainable and green bonds also hit record levels in the region in 2022, with issuances reaching US$8.5BN from 15 deals.
This last August the UAE Banks Federation reported that six major UAE banks have committed over US$51.8 BN in green financing for various projects. In addition, the public sector has followed suit with efforts to weave climate goals more directly into the financial fabric – aligning targets with the national strategic plans and, in the case of the Central Bank of the UAE (CBUAE) and the Saudi Central Bank (SAMA), creating pilots in 2022 that incorporated climate transition risks into their stress tests.
Economy Middle East: What about dislocated assets? What is the conversation surrounding this and what opportunities lie for investors?
Vikas Papriwal: Effects from the macro-economic turmoil evident in markets around the globe – things like higher interest rates, rising number of non-performing loans, increased amount of distressed assets – may have come to the region more recently than elsewhere, but there is no question that the markets and governments in the Middle East are now confronting both the challenges and opportunities from these conditions. Aided by changing regulations around insolvencies (for example reforms to the Saudi banking laws in 2019), the region’s financial institutions have been proactive in trying to mitigate the effects of increased cost of capital, or manage non-performing loans, and find value in distressed assets using a number of tools that are now available to them. We have seen a number of outside investors move into the region to offer expertise and capital to provide alternative solutions like carveouts, take-privates or secondary trades.
About Vikas Papriwal, senior managing director, leader at FTI Consulting Middle East and Africa
Vikas Papriwal leads FTI Consulting Middle East and Africa. He is also the Head of Corporate Finance and Restructuring practice in the Middle East. He has more than 30 years of experience providing restructuring advice and financial solutions to a wide range of stakeholders in growth, stressed and distressed situations.
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