Saudi Arabia’s Vision 2030 has been instrumental in invigorating the country’s financial industry. A surge in IPOs and mergers and acquisitions — coupled with growing investment opportunities across several sectors for locals and foreigners alike — characterize the nation’s financial and investment landscape. The investment banking market, in particular, is projected to reach a revenue of $1.02 billion this year. By 2029, the figure could hit $1.15 billion, reflecting a growth rate of 2.43 percent.
In this interview, EFG Hermes KSA CEO Saud Altassan talks about how Vision 2030 reforms reshape the investment banking sector and the strategic steps that the company takes to leverage these opportunities. He also discusses their multifaceted approach — covering digital innovations and revenue stream diversification — to ensure their continued growth.
How are Saudi Arabia’s Vision 2030 reforms impacting the investment banking sector, and what opportunities do they create for EFG Hermes KSA?
Saudi Arabia’s Vision 2030 is a transformative blueprint that aims to diversify the economy from oil dependency by fostering growth in various sectors such as technology, healthcare, entertainment, and tourism. This ambitious plan has opened many opportunities for the investment banking sector. At EFG Hermes KSA, we view Vision 2030 as a catalyst for change, driving increased market activity and regulatory advancements and opening up new investment sectors.
The reforms have led to a more dynamic and competitive financial market, with increased privatizations and a surge in M&A and IPO activity. This presents a fertile ground for EFG Hermes KSA to offer advisory, asset management, and brokerage services. As the government seeks to attract both domestic and foreign investment, we are strategically positioned to capitalize on these opportunities. Our deep local expertise combined with a robust regional and international network enables us to guide our clients through these transformative changes, ensuring they are well-positioned to take advantage of the evolving landscape.
Tadawul has been one of the best-performing markets globally in recent years. How is EFG Hermes KSA leveraging this growth, and what are your expectations for the market going forward?
Tadawul’s strong performance in recent years reflects the success of Saudi Arabia’s economic diversification efforts under Vision 2030. At EFG Hermes KSA, we have proactively leveraged this growth by expanding our product offerings, deepening our market research, and enhancing our technological capabilities to serve our clients better.
Since 2019, we have successfully closed over 14 IPOs in the Kingdom, with a large pipeline of ongoing IPOs that underscores our commitment to capitalizing on this growth. Our strategy has involved increasing our participation in high-growth sectors, improving access to investment opportunities for our clients, and providing them with insightful market analysis and advisory services. We believe that ongoing economic reforms, increased foreign investor participation, and a burgeoning pipeline of public offerings will support Tadawul’s continued growth.
Looking forward, we are optimistic about the prospects for Tadawul, anticipating sustained momentum driven by both macroeconomic factors and sector-specific growth. EFG Hermes KSA is committed to remaining at the forefront of this growth and continuously innovating to meet the evolving needs of our clients.
What are the most promising sectors or industries in Saudi Arabia that EFG Hermes KSA focuses on for future growth? Can you share key deals in your pipeline?
In alignment with Vision 2030, EFG Hermes KSA has identified several key sectors with promising growth opportunities. We are sector agnostic and have had the privilege of working on deals across various sectors in the Kingdom, ranging from consumer discretionary to energy, healthcare, and entertainment. This diverse exposure gives us a unique perspective on the significant growth potential in all these areas.
As Saudi Arabia advances its economic diversification, we see significant opportunities across all sectors. The rising demand for healthcare, energy solutions, and consumer-driven businesses, among other industries, creates a wealth of growth prospects.
Although confidentiality agreements prevent us from disclosing specifics, I can share that we are currently advising on several high-profile transactions across these sectors. These deals will not only bolster our portfolio but also contribute to the broader economic goals of Vision 2030.
With the increasing interest in ESG (Environmental, Social, and Governance) investments, how is EFG Hermes KSA integrating ESG factors into its investment strategies?
EFG Hermes KSA recognizes the growing importance of ESG factors in investment decision-making. We are committed to integrating these principles into our investment strategies to ensure our operations are sustainable and aligned with global best practices.
We have developed a comprehensive ESG framework that guides our investment processes. This framework ensures that environmental, social, and governance considerations are systematically integrated into our decision-making. Our focus on ESG helps us mitigate risks and enhances long-term value creation for our clients.
Moreover, we are actively engaging with companies in our portfolio to encourage adopting ESG practices. This aligns with our belief that responsible investment is not just a moral imperative but also a strategic necessity in today’s market.
EFG Hermes KSA has established itself as a leading financial services company in the MENA region. With global economic uncertainties, how is the company preparing to ensure resilience and continued growth in the coming years?
In today’s volatile global economic environment, resilience and adaptability are more important than ever. At EFG Hermes KSA, we are adopting a multifaceted approach to ensure our continued growth and stability.
Firstly, we diversify our revenue streams by expanding our services across different sectors and markets (i.e., ECM, M&A, DCM, research, and brokerage). This diversification strategy reduces our dependence on any single market or industry, thereby mitigating risk.
Secondly, we are investing strategically in technology and innovation to elevate our operational efficiency and enhance client service delivery. A prime example is the recent launch of the latest edition of our award-winning trading app, EFG Hermes ONE, in Egypt and Kuwait. It’s designed to give our clients a competitive edge, and we hope to launch in KSA soon. By embracing digital transformation, we are committed to staying ahead of the curve and addressing the evolving needs of our clients.
Lastly, we are maintaining a strong focus on risk management. Our robust risk management framework enables us to anticipate and respond to market challenges effectively. This, coupled with our deep market expertise and strong client relationships, positions us well to navigate global uncertainties and continue our growth trajectory.
For more interviews, click here.
