Founder and CEO of Aliph Capital, Huda Al-Lawati on soaring trade with Asia, growing investor appetite to boost Gulf market growth

Trade between GCC and Emerging Asia set to overtake trade with advanced economies by 2026
Founder and CEO of Aliph Capital, Huda Al-Lawati on soaring trade with Asia, growing investor appetite to boost Gulf market growth
Huda Al-Lawati, founder and CEO of Aliph Capital

Economy Middle East speaks to Huda Al-Lawati, founder and CEO of Aliph Capital, on the importance of digitalization at companies, strong Middle East-Asia trade ties, and opportunities for women in the financial sectors.

Huda Al-Lawati also talks about her motivation behind setting up a private equity company and the challenges she faced.

In what ways can digitalization boost the growth of the private equity market in emerging economies? What important digitalization initiatives has Aliph Capital recently implemented? How have these impacted your operations?

What can boost PE market growth is the need for digitization and technology. Technology is no longer an option but a necessity for success today.

However, digital transformation (Dx) is both expensive and difficult to navigate. As such, the need for Dx also creates a need for capital and expertise. A particular strength of Aliph Capital is that we not only fund Dx journeys, but also help portfolio companies in designing and implementing fit-for-purpose digital transformation roadmaps.

An example is our work post acquiring The Petshop – the UAE’s largest omnichannel pet services business in 2022. We identified and addressed backend ERP gaps, launched a B2B e-commerce platform, added express delivery, integrated CRM (customer relationship management) & marketing automation system to centralize online & in-store data, automated marketing channels, rolled out an AI-powered search engine and launched a centralized data warehouse supporting customer engagement by driving insights into basket mix, retention and opportunities. The most important aspect of what we do is bringing the conversation around Dx to the board and ensuring that management teams take ownership and have proper incentives to prioritize tech enablement.

Some experts say the Middle East and Asia corridor is an emerging, potentially powerful conduit for global capital. What are your thoughts on this and what are the opportunities?

I think that we should not ignore this corridor. The trade between the two regions is growing at an explosive rate. In fact, as per research by Asia House, Gulf-Emerging Asia trade has surged by some 35 percent between 2021 and 2022. Meanwhile, trade between the GCC and Emerging Asia could overtake trade with Advanced Economies in 2026. Several factors are driving this growth, including Asia’s increasing role as a primary oil importer (particularly with the U.S. achieving oil self-sufficiency), the GCC’s significant food imports coupled with India’s status as the world’s second-largest food producer, and growing investments from the GCC’s sovereign wealth funds into Asia. Efforts to enhance ties and foster partnerships are evident in the accession of UAE and Saudi Arabia into BRICS, the ASEAN-GCC Summit in Riyadh, and UAE’s Comprehensive Economic Partnership Agreements with India and Indonesia.

The GCC has committed to becoming a diversified, global economy. Diversifying our trade and investment networks globally is essential to achieving this goal. We have successfully established ourselves not only as oil exporters but also as prominent global investors and leading transport and logistics centers. It’s crucial to acknowledge the significant and growing Asian demographic contingent in the GCC expat ecosystem.

Fostering ties among regions abundant in talent, energy, knowledge base and food resources benefits all involved and creates opportunities across the board. Increased trade flows generate opportunities within the servicing and building logistics infrastructure. E-commerce growth drives demand for last-mile delivery solutions. Growing demand can also incentivize companies to establish manufacturing bases in the GCC. Growing tourism presents opportunities in hotels, airlines, and travel agencies – these are just some examples.

Huda Al-Lawati

What will investors’ appetite be in 2024?

For 2024, we expect to see transactions in various fast-growing and dynamic sectors – showing the hunger of Gulf economies to diversify, coupled with an entrepreneurial and optimistic approach.

Currently, the region’s mid-market is often neglected in favor of large caps and fashionable venture arrivals. This leaves mid-cap companies as an attractive space for value-seeking investors. This is ideal for Aliph Capital as we can help mid-caps navigate today’s challenges with our experience and insight on technology enablement, helping them scale profitably.

Let’s talk about the gender gap in the workplace in the region. While women are making headway in some sectors, what is the situation like in the private capital space? What insights can you share with women trying to break the glass ceiling in this industry?

It is not said often enough, but the reality is the Middle East offers major opportunities for women. In the last decade, women have made amazing progress in financial services and society more generally. There are many examples of women succeeding on merit.

Rola Abu Manneh has been CEO of Standard Chartered Bank UAE since 2018 and Hana Al Rostamani has been CEO of First Abu Dhabi Bank since 2021. Sarah Al-Suhaimi has chaired the Saudi Arabian Stock Exchange since 2017 – when she was only 37. In diplomatic circles, Lana Zaki Nusseibeh has served as the UAE’s ambassador to the U.N. since 2013 and HRH Reema bint Bandar Al Saud has been Saudi Arabia’s ambassador to the U.S. since 2019.

The advances made by women in the past few years have been huge and we should recognize these successes.

Of course, I do not want to ignore the reality that much remains to be done. In private equity, women hold less than 12 percent of senior positions worldwide, so this is a global issue, not just a regional one.

Read: Transparency, good governance boost investor confidence in UAE: EFG Hermes CEO Moustafa El Chiati

Why did you decide to set up a company in the private equity industry? What was your initial journey like? What challenges did you have to face – and overcome?

Since entering the private equity industry, my passion for excellence has driven me and I have developed a desire to build a leading, independent alternative asset manager based out of this region.

I established Aliph Capital at a time when I felt there was a specific opportunity ripe for execution in the GCC’s private mid-market space, where I believe you can realize great value by employing a targeted, multi-faceted value creation strategy.

The main challenges I face are the same as those faced by any first-time manager – lack of pockets that invest in first-time funds, fund size, and of course, resource limitation. In the U.S., there are many emerging manager programs that pensions and other institutions lead. However, they tend to be limited to the U.S. Having said that, there are some sovereign wealth funds that are making an explicit effort to provide support here. We also have the additional challenge of operating in a market where private equity is a nascent asset class with broadly a limited track record. It is also a region that people from outside the GCC do not ofter target.

The other challenge that everyone is facing today is that of talent – talent will always be our biggest strength but finding talent is not easy.

About Huda Al-Lawati

Huda Al-Lawati is the founder and CEO of Aliph Capital.

Al-Lawati founded Aliph Capital in 2021, one of the first female-founded private equity firms in the Middle East. Huda Al-Lawati has 21 years of industry experience. Before Aliph Capital, Huda Al-Lawati held roles such as partner at Gateway Partners and chief investment officer at Savola Group. Huda Al-Lawati was also a partner and chief investment officer for MENA at the Abraaj Group.

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