• Thu. Sep 21st, 2023

Investment banking for positive impact and sustainability

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Author: Rohit Walia, Executive Chairman and CEO, Alpen Capital


Since its inception in 2005, Alpen Capital has helped businesses across the GCC region and beyond access finance, grow their long-term value and achieve their strategic objectives. Now the company is expanding and consolidating its place in both established and developing markets while also ensuring its transactions make the right environmental and social impact, particularly in supporting agribusinesses, empowering women, and providing access to finance for small businesses and unbanked populations.

What message would you want to give to our readers who might be unfamiliar with your organisation? What sort of customers are you hoping to attract?
Alpen Capital is an investment banking advisory firm specialising in providing customised solutions in the areas of debt, M&A and equity to institutional and corporate clients. Our deep local know-how and regional expertise has enabled us to execute transactions for leading business conglomerates and financial institutions across the GCC, South Asia, Levant and Africa. With offices in Dubai, Abu Dhabi, Doha, Muscat and New Delhi and an operational footprint in 36 countries, our vast network of international investors and funders gives us the ability to structure unique and innovative solutions for our clients.

We strive to work with clients who want to grow the long-term value of their business across various sectors such as retail, healthcare, insurance, hospitality, education and food. We are committed to partnering with companies that focus on environmental social governance and renewable/green energy. We are especially interested in African countries and developing countries too. We also aim to engage with financial institutions that have a green lending book and support in achieving the Sustainable Development Goals (SDGs) outlined by the United Nations.

What is Alpen Capital’s key focus right now in terms of new business development and areas for growth?
Currently, Alpen Capital’s focus is on consolidating its position in its operating markets and at the same time looking for opportunities to venture into new markets, particularly Africa and Southeast Asia. In recent years we have successfully completed numerous transactions in emerging markets like Kenya, Cameroon, Nigeria, Jordan, Bangladesh and Sri Lanka and we are keen to enhance our presence in these regions. We are particularly interested in advising organisations in Vietnam, Indonesia, Uzbekistan, Egypt and Jordan, given the interest from our funding partners in these countries.

To further strengthen our capabilities, we have recently entered into a strategic partnership with IMAP – International M&A Partners, to become its exclusive partner for M&A activities in the GCC. This collaboration will enable us to leverage IMAP’s vast network of over 450 M&A professionals in more than 40 countries. It will further expand our reach, giving us the platform to source and execute transactions in collaboration with other IMAP partner firms worldwide.

Could you describe some recent deals that were especially interesting?
Over the past few years, we have closed several interesting deals in the M&A space. One such deal involved advising Multi-Specialty Healthcare Partners Holding (MSH), a young organisation, in divesting 60 percent of its stake to Gulf Finance House, a prominent regional investor. The transaction included the acquisition of about 21 specialised healthcare clinics based in Abu Dhabi.

Although MSH had witnessed significant growth in its initial three years, the company faced challenges in terms of standardising its systems and processes, which made it difficult to present a consolidated picture to potential investors.

We strive to make a positive impact on the communities and environment we operate in

Alpen Capital worked closely with the shareholders and management to prepare for a private placement of equity, which included creating proforma consolidated financials, preparation for a detailed diligence exercise and structuring the business and operations under a Holdco structure. As a result, the desired equity value was secured and favourable working terms for the owner with the incoming investor were achieved.

In addition to this, we also concluded our first deal in the fintech space where we advised Monument Bank, a leading neobank focused on the ‘mass-affluent’ segment in the UK, to raise funding for its Series B round. Our network of strong relationships with investors across the region helped the bank secure an anchor investment from Dubai Investments, one of the largest investment companies in the GCC. This deal provided a GCC-based investor with a unique opportunity to enter the digital banking space in one of the most advanced and regulated markets at an early stage.

What is Alpen Capital’s highest priority in terms of sustainability, and how do you progress this when assessing the suitability of a potential new deal?
We strive to make a positive impact on the communities and environment we operate in. Our focus has been on working with emerging market clients that support financial inclusion, women’s empowerment, and agribusiness as well as the food and water segments. We partner with Development Financial Institutions (DFIs) and Impact Investing Funds (IIFs) to raise funding for these clients. This in turn supports the SDGs and makes a socio-economic impact in emerging markets.

How did you approach your landmark CSR report, and did you map this against the UN Sustainable Development Goals?
Our CSR report entitled ‘Sound Impact’ has been segmented into four quadrants – marketplace, workplace, community and environment. The marketplace quadrant showcases around 30 transactions that we have executed with financial institutions, DFIs and IIFs and maps them against the SDGs outlined by the United Nations. The remaining quadrants highlight our CSR activities and initiatives.

Development institutions and impact funds invest in sustainable businesses that create socio-economic impact and support in achieving the SDGs. In our report, we have compiled information about all our sustainable finance transactions to present the impact story behind each deal. We have highlighted the SDGs that were supported by the successful completion of the transaction and through our deals we have supported at least nine different SDGs.

Can you give an example of a deal that is particularly notable in terms of its sustainability and impact in a developing market?
Our transaction with Tata International Limited (TIL) is a great example of creating a notable impact across multiple countries in Africa. TIL, the primary trading arm of the Tata Group, has a significant presence in Africa with operations in more than 19 countries. In addition to the trading business, TIL is also a distributor of automobiles, commercial vehicles and agriculture and farm equipment. Traditionally, Micro, Small and Medium Enterprises (MSMEs), farmers and other unbanked populations face difficulty in securing finance from local banks. TIL supports them by offering direct credit and short-term financing solutions to buy commercial vehicles.

Alpen Capital put together a unique funding structure for TIL for on-lending to MSMEs, first-time users, and unbanked populations across Africa facilitating purchase of commercial vehicles distributed by them. The increased sale of commercial vehicles and farm equipment is expected to support local entrepreneurs, farmers and MSMEs in expanding their business, and create economic development at a local level across the African continent. In addition, this is likely to contribute to the replacement of old vehicles, leading to a reduction in carbon emissions.

Why is it important to Alpen Capital to support agribusiness in the regions where you are most active? What sort of deal showcases the type of transactions you have successfully closed in this area?
The development of the agri sector is crucial for reducing poverty, promoting economic growth, and providing employment opportunities for rural communities in underdeveloped and developing countries.

Alpen Capital acted as a strategic advisor to Sahyadri Farmers Producer Company (Sahyadri FPC) and its subsidiary Sahyadri Farms Post Harvest Care (SFPHCL) for over four years. Sahyadri FPC is a prime example of rural entrepreneurship, providing end-to-end solutions to small and marginal farmers.

In 2010, a group of 10 farmers began collectively producing and exporting fresh grapes to Europe, and this initiative has since grown into a leading fruits and vegetable export and processing company that Sahyadri FPC is today.

We have helped Sahyadri FPC secure financing for constructing collection and distribution centres, expanding their production plant and launching retail stores in urban areas. These infrastructure enhancements are expected to boost the agricultural and food processing operations of Sahyadri FPC.

Furthermore, we assisted their subsidiary SFPHCL in obtaining equity growth capital to expand its processing capacity for fruits and vegetables-based products, establish a biomass plant to generate electricity from process waste, and upgrade its infrastructure.

Financial inclusion and female empowerment are also recognised by Alpen Capital as crucial markets not only ripe for investment, but also for having positive knock-on effects when sustainably supported. Is there a notable deal in this area you would like to highlight?
Providing financial access to women can boost entrepreneurship and broaden the scope of financial inclusion in the unbanked sectors of developing countries. Alpen Capital has played a part in this by helping IndusInd Bank raise funding for its Microfinance Division, which provides loans to small groups of women borrowers working mainly in livestock and small trade sectors. IndusInd Bank has a wide presence across India and offers a range of products and services to individuals and corporates.

The financing raised by Alpen Capital for IndusInd Bank’s Microfinance Division is expected to enable the bank to increase the number of microcredits allocated to women entrepreneurs in severely poor rural areas in India. This is expected to provide access to microcredit for approximately 250,000 women, contributing to the development of women’s entrepreneurship and financial inclusion in some of India’s most vulnerable regions.

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