Omani State Reserve Fund, the secret partner, and the Balkan Investments - part 2

Who is The Omani State General Reserve Fund's mystery partner?


When Oman's State General Reserve Fund snapped up control of Equest Investments Balkans Ltd, their UK listed partner in a 600 million euro Bulgarian Ski resort deal (see previous post), while conveniently outside the reach of the UK's Code of Takeovers & Mergers (which would oblige disclosure of owners I bet),

The Board notes that State Street (Nominees) Limited, as nominee for SGRF, currently holds 5,894,834 ordinary shares of no par value in the Company ("ordinary shares") (representing 32.27% of the issued share capital of the Company) and funds managed by Kairos own 3,743,866 ordinary shares in the Company (representing 20.50% of the issued share capital of the Company). SGRF and Kairos together control 52.77% of the issued share capital of the Company.

The Company is incorporated, and has its registered office, in the British Virgin Islands and has its ordinary shares only admitted to trading on the AIM Market of the London Stock Exchange. Accordingly, the Directors do not believe that the Company is subject to the provisions of The City Code of Takeovers and Mergers.

it still meant that according to the AIM stockmarket rules, the new Directors had to list their other Directorships and post a very short bio, which makes interesting reading (see end of post).



Before we dive into those detailed directors interests filings, to me it does look like Oman got a very interesting company in the firesale of the crisis, and as their partner in the ski deal, it probably had to be rescued anyway. After all, whats 20 mln euro against a 600 mln deal, for the SGRF? Bargain!!!

Here's a synopsis of EIB ( in their own words):

Equest Investments Balkans Limited (EIB) currently has ten companies – in Financial Services, Retail, Waste Management and Land and Property Development, predominantly with majority equity holdings. Its principal focus is on Bulgaria and Romania, but considers appropriate investments in the rest of the Balkan region.

Unfortunately, their super-cunning investment strategy was to leverage everything like crazy.

As part of our investment strategy, Equest borrows from commercial lenders as we anticipate that higher returns are achievable through investments than the cost of debt financing.

Ooops.

Still, a cheapish punt on Eastern Europe if you're looking for one. But I digress.

Here's the AIM stock exchange filing entry describing the new, non-exec director of Equest Investments Balkans Ltd (and majority shareholder representative) Mr Al Kharusi, head of SGRF:

Mr Al-Kharusi, a resident of Oman, joined the SGRF in 1985 as the Director General and is now the Chief Executive Officer of the SGRF. He holds a Diploma in Business Administration.
Mr Al-Kharusi (aged 55) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:

Current Directorships / Partnerships:
Eagle Properties (L.P.) No.3
Eagle Properties (L.P.) No.4
Eagle Properties (L.P.) No.6
The European Acquisition Company S.a.r.l.
The European Acquisition Company 2 S.a.r.l.
Bulgarian Acquisition Company VI S.a.r.l.
Wopac No.1 Limited
Palm Properties
Sprint (GP) Limited
Normandy (GP) Limited
SEE Capital Sarl
Eagle Properties 7
Spartak Tours AD
Vietnam Oman Investment Company
Advent International
Migros
National Investment Funds Company
Grand Angle Holding France SAS
Le Trema France Property S.A.R.L.
Bulco Acquisition AD

Past Directorships / Partnerships:
None

A very nice list of all the companies SGRF have obviously been investing in! This is not something you find in the business section of the incisive and hard hitting Times of Oman, or even on Google very easily.

Even though many of them are holding companies, I think you'll find some reward for random googling and cross-referencing of the companies above. Let us know what you find.

(There are also cloak and dagger reports of the SGRF trying to take part in a highly secret multi-billion leveraged hostile buy-out of Dow chemical, if you're interested in such things. Dodged a bullet when that one fell through, eh guys? You'd have been down a few billion there already!). And Bulgaria is apparently being looked at for further investment by Oman Oil Company in a huge fertaliser company investment.

Should young Omani's be busy learning Bulgarian, German and Serbo Croat?

Plus you can take a look at the partners bio too:

The newly re-appointed Exec Director, Mr Krumov, owns 3.17% of the company, and is a well connected Bulgarian businessman, who as it happens is also an equity partner with the Omani SGRF in another real estate business in Bulgaria:

SEE Capital Management SARL, which is owned as to 40% by Mr Krumov and 60% by SGRF, is involved, through its Bulgarian subsidiary, in providing management, consultancy and development services in relation to property projects in Bulgaria.

That must all get complicated, eh? Plus there are a slew of other companies, like Equest Capital Management Limited and Equest Property Management Limited, also involved in the development property market.

Its also curious how both of the 2 representatives on the board from the mysterious Kairos Investment fund, (representing a co-owner of 20.50% of Equest Investments Balkans Ltd and clearly takeover partners of the company along with Oman) are also directors of unusually named 'Foundations', probably for Corporate Charity work:

Mr Brera (aged 39) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:

Kairos investment Management SpA
Kairos investment Management Limited
Oliver Twist Foundation

Past Directorships / Partnerships:
None

Mr Azizjoined Kairos in January 2006 ...Previously Mr Aziz has specialised in Telecoms research and he held a number of senior research positions at securities houses in London and Karachi...
Mr Aziz (aged 43) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:

Current Directorships / Partnerships:
Little Lord Fauntleroy Foundation

Past Directorships / Partnerships:
None
...

Does anyone else not find that curious? What's going on with that?
Ahh, here... via the Italian site. Nice.

And who owns the 20%??? Remember these guys just represent "funds managed by Kairos"... In fact:

Kairos Asset Management is a boutique investment firm focusing on customized investment solutions for institutional and affluent investors.

The Kairos Vision
Kairos Asset Management, LLC was formed to provide individual and institutional clients with access to customized and unique investment solutions without the inherent conflicts of interest at traditional Wall Street firms and Commercial Banks.

At Kairos Asset Management, we maintain an independent perspective. We have invested in state of the art technology and research to enhance our client offering. Having spent several years managing one of the most successful teams at a global wirehouse firm, we believe there is a better way to serve clients and we seek to offer that solution.

Still, I wonder who the secret investor is?



The extra boring bit...

RNS Number : 8573N
Equest Investments Balkans Ltd
25 February 2009

Equest Investment Balkans Limited
(the "Company")
Appointment of Directors

Further to the announcement on 4 February 2009 that the Company's two largest shareholders, namely the State General Reserve Fund of the Sultanate of Oman ("SGRF") and Kairos Investment Management Limited ("Kairos"), had requested the appointment of representatives of SGRF and Kairos as directors of the Company, the board announces that today:
• Mr Warith Mubarik Al-Kharusi;
• Mr Faisal Amur Mohamed Al-Riyami;
• Mr Guido Maria Brera; and
• Mr Kalim Aziz
have each been appointed a Non-Executive Director of the Company and that:
• Mr Georgi Krumov
has been re-appointed an Executive Director of the Company.
SGRF currently holds 5,894,834 ordinary shares of no par value in the Company ("ordinary shares") (representing 32.27% of the issued share capital of the Company) and funds managed by Kairos own 3,743,866 ordinary shares in the Company (representing 20.50% of the issued share capital of the Company). SGRF and Kairos together control 52.77% of the issued share capital of the Company.

Enquiries:
Equest Investments Balkans Limited
Tel: + 44 20 7240 7600
Petri Karjalainen
Naomi Kora
Financial Dynamics
Tel: + 44 20 7831 3113
Nick Henderson
David Cranmer
Collins Stewart Europe Limited (Nomad)
Tel: +44 20 7523 8350
Hugh Field KBC Peel Hunt Limited (Broker)
Tel: + 44 20 7418 8900
Capel Irwin
Disclosures under AIM Rules

Mr Al Kharusi
Mr Al-Kharusi, a resident of Oman, joined the SGRF in 1985 as the Director General and is now the Chief Executive Officer of the SGRF. He holds a Diploma in Business Administration.
Mr Al-Kharusi (aged 55) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:

Eagle Properties (L.P.) No.3
Eagle Properties (L.P.) No.4
Eagle Properties (L.P.) No.6
The European Acquisition Company S.a.r.l.
The European Acquisition Company 2 S.a.r.l.
Bulgarian Acquisition Company VI S.a.r.l.
Wopac No.1 Limited
Palm Properties
Sprint (GP) Limited
Normandy (GP) Limited
SEE Capital Sarl
Eagle Properties 7
Spartak Tours AD
Vietnam Oman Investment Company
Advent International
Migros
National Investment Funds Company
Grand Angle Holding France SAS
Le Trema France Property S.A.R.L.
Bulco Acquisition AD

Past Directorships / Partnerships:
None

Mr Al-Riyami
Mr Al-Riyami, a resident of Oman, joined the SGRF in June 2007 as the Section Head of Direct Investments of the SGRF.
Mr Al-Riyami was previously the Finance Director of Railtech Solutions Limited ("Railtech Solutions") (see further below), a company located in Portsmouth in the UK specializing in IT software for principally road and rail networks in the transportation sector (2005 to 2007), Financial Controller of Nawras Telecom (2004 to 2005) and an Internal Auditor at Bank Muscat (1999 to 2004).
Mr Al-Riyami holds an MBA (Finance) from the University of Leicester and is a member of the Chartered Financial Analyst Institute and the Chartered Alternative Investment Analyst Association.
Mr Al-Riyami is a director of Borovets Invest EAD, which is a joint venture between a subsidiary of the Company and the SGRF.
As noted above, Mr Al-Riyami was appointed the Finance Director of Railtech Solutions (a company incorporated in England & Wales with registered number 03973036) on 1 November 2005. At the time of his appointment, Railtech Solutions was in financial difficulties and Mr Al-Riyami joined in that knowledge and with the express intent of trying to restructure and turn around Railtech Solutions. He resigned as a director of Railtech Solutions on 6 March 2007. On 29 March 2007 joint administrators were appointed to Railtech Solutions, under the floating charge, under Paragraph 49 of Schedule B1 to the Insolvency Act 1986. The winding up of Railtech Solutions commenced in June 2008 and Railtech Solutions was dissolved in January 2009. The secured creditor was paid in full and the shortfall for unsecured creditors was approximately £1 million.

Mr Al-Riyami (aged 32) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:

Current Directorships / Partnerships:
SEE Capital Management Sarl
Spartak Tours AD
Borovets Invest EAD

Past Directorships / Partnerships:
Railtech Solutions Limited

Mr Brera
Mr Brera, who is Italian, is a co-founder of Kairos. He graduated from Universita La Sapienza, Rome and qualified as a Dottore Commercialista (the equivalent of a chartered accountant) in 1993. In 1994, he joined Fineco SIM, concentrating on relative value trades, calendar spreads, stock index futures arbitrages and the establishment of structured products for institutional clients. In 1996, he joined Cisalpina Gestioni as manager of the Cisalpina Bilanciato and Cisalpina Indice funds. In 1997, he joined Giubergia Warburg as director, Head of Proprietary Trading, leaving to establish Kairos in early 1999. Mr Brera has been co-manager of Kairos Fund Limited since its inception in June 1999.
Mr Brera (aged 39) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:

Kairos investment Management SpA
Kairos investment Management Limited
Oliver Twist Foundation
IMATION (Italy)

Past Directorships / Partnerships:
None


Mr Aziz
Mr Aziz joined Kairos in January 2006 and is the co-fund manager of the Kairos Eurasian Fund with Guido Brera and is the primary analyst at Kairos for stocks in the Eurasian markets. Before joining Kairos, he was Head of Equity research for the EMEA Region at UniCredit Banca Mobiliare in London (2004 to December 2005). Previously Mr Aziz has specialised in Telecoms research and he held a number of senior research positions at securities houses in London and Karachi. Mr Aziz holds a Masters in Business Administration from the University of Karachi.
Mr Aziz (aged 43) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:
Little Lord Fauntleroy Foundation

Past Directorships / Partnerships:
None

Mr Krumov
Mr Krumov was previously appointed an executive director of the Company on 23 June 2008 and resigned on 7 November 2008.
Mr. Krumov has more than thirteen years of experience in executive positions in multinational companies operating in Bulgaria and the region such as Cable & Wireless (UK), Burmah Castrol (UK) and British Petroleum (UK). Mr. Krumov is an owner of a diversified group of companies operating in Bulgaria, one of which is Electron Progress AD, one of the country's largest suppliers in the defence communication sector.
Mr. Krumov, together with Mr. Kari Haataja and Mr. Petri Karjalainen (who are also directors of the Company) are the owners of Equest Capital Management Limited. Prior to the reorganisation of the management structure of the Company earlier in 2009, the Company had delegated the day-to-day management of its investment portfolio to Equest Capital Management Limited, which acted as the Investment Manager to the Company.
Mr. Krumov previously owned an indirect interest in 20 per cent. of the issued share capital of Avto Union AD (which is a subsidiary of the Company).
Mr Krumov (aged 46) holds or has held the following directorships, and is or was a member of the following partnerships during the past five years:
Current Directorships / Partnerships:

Avanti Capital EAD
Avto Union AD
Axes Europe OOD
Boyana Residence OOD
Burma Oil TP
Companies Management International Centre AD
Equest Capital Management Limited
Equest Property Management Limited
GBK EOOD
Gransport Auto EOOD
IQuest EAD
Mejdunaroden Tzentar Po Firmeno Upravlenie AD
National Board of Tourism Association
Novera AD
Rila-Samokov 2004 AD
SEE Capital Management AD
SEE Capital Management Sarl
Spartak Turs AD
Uniqa Health Insurance AD
UNIQA Insurance Company AD
Nigo 62 SD
VIP International Services OOD

Past Directorships / Partnerships:
Atia Holidays EAD
Banya Holiday AD
Bellevue Property Management EAD
Borovets Investments EAD
Castrol Italiana
Cherno more- Belvue OOD
Equest EAD
Electron Progress AD
EPM Holding EAD
Equest Investment Balkans Limited
Equest Partners Limited
Hastings EOOD
Insurance Company Vitosha AD
Lexington EAD
Star Motors EOOD
Strategicle defencive systems AD
Union Properties EAD

Mr. Krumov has a beneficial interest in 579,517 ordinary shares in the Company (representing 3.17% of the issued share capital) and 188,308 warrants in the Company.
SEE Capital Management SARL, which is owned as to 40% by Mr Krumov and 60% by SGRF, is involved, through its Bulgarian subsidiary, in providing management, consultancy and development services in relation to property projects in Bulgaria.
There are no further disclosures required under paragraph (g) of Schedule Two of the AIM Rules for Companies in respect of Mr Al-Kharusi, Mr Al-Riyami, Mr Brera, Mr Aziz and Mr Krumov.