Interview with Munther Hilal

Sousou Partners were delighted to sit down with Munther Hilal as part of our series ‘View from the Middle East.’ In these interviews, we’ll be looking at the transformation happening in the region through the lens of real assets, showcasing the unique perspectives of individuals on the ground.

Munther Hilal is Founder and Managing Partner at Gate Capital, a Corporate Finance Advisory firm based in Dubai, UAE. Prior to this, he was the Chief Investments Officer at Unicorn Investment Bank and has served Senior Management roles at Regional Corporate and Family groups; and is known for his ability to source, structure and transact large complex deals. He also founded Capital Industries & Investments, a PE firm which won the best PE award in 2008. 

Munther Hilal

How has Gate Capital evolved over the years?

Gate Capital was founded in 2009 to provide debt financing to local groups in the UAE and wider GCC. Over the years we have evolved and expanded into different sectors and are now providing all types of corporate finance advice, restructuring, M&A, debt and equity capital structuring and transactions. Whilst we aren’t an asset manager, we do provide outsource CIO function for many entities and also sit as an independent member on the boards of various family groups to advise them on expansion strategies, growth and restructuring their operations. As a group we like to keep a low profile, although we have advised on, since 2009, over $2bn worth of transactions, which puts us in the top tier of our sector.

What changes have you seen happening in Saudi?

Over recent years, we have seen a major shift underway within Saudi, under the new leadership, with many more economic reforms and strategies empowering the youth, providing opportunities, and creating new platforms for growth, all part of the Vision 2030. The SWFs have taken an active role towards elevating the private sector through their PPP programmes, elevating benchmarks, business practices and applying private equity and financial models allowing value creation, enhancements and facilitating liquidity events that allows for the circulation of such returns back into the economy. Multiple verticals were set up focusing on various sectors that support the Vision 2030, spread across Real Estate, all the way from Entertainment to Sports.

International companies are being encouraged to set up in the Kingdom to provide services to cater for the growth witnessed in the country, backed by subsidies and support to enable them to have regular engagement with public and private sectors.

Real estate has been one of the major drivers of wealth creation in the country, equivalent to that in the region, and more focused towards enhancing the offering, elevating the living standards compared to its peers globally that will entice further migration of talent to benefit the domestic market.

How is Gate Capital positioning itself to take advantage of these changes?

Throughout the last 15 years and in addition to our global reach, Gate has developed a wider knowledge and experience and built a strong network of principals, sovereigns, and institutions in the Kingdom. We are sector agnostic, and have transacted widely in sectors such as oil and gas, real estate, logistics, speciality chemicals and hospitality. Many family offices have been actively involved in multi discipline businesses, which allowed us to integrate and merge core assets with different groups while re-allocating the asset base through enhanced structures.

Is Gate Capital just working with local organisations, or are you seeing more interest from international groups?

We work both with Saudi groups and international groups; we’re certainly doing more cross-border transactions recently. We just acted on behalf of a local group to offload their interest in one of their contracting arms to a UK based global player looking to expand their global footprint into Saudi. We are regularly approached by international firms seeking a foot in the door in the Kingdom through acquisitions in multiple sectors.

Family groups are typically shifting their strategy to currently focus on local growth, as opposed to international expansion. Having said that, some still maintain a core strategy of international diversification. The quantum from groups investing into funds or private equity has witnessed a slowdown, most of the activity we believe is in investing in GP stakes in that sector.

How is the real estate market changing in Saudi?

The real estate sector has witnessed an uphaul by creating multi use offerings through integrated and sophisticated urban planning, initially led by family groups and recently backed by sovereign establishments. We are seeing the growth of real assets across retail, hospitality, logistics and infrastructure. A more disciplined approach with deeper regulatory framework has attracted institutional investors as well as retail capital.

Cityscape Global, which took place in Riyadh last month, has demonstrated the capabilities of the Kingdom to showcase mega projects across the country, mixed between hospitality developments in the Red Sea all the way to economic zones and mixed-use commercial sites along with upgraded high-end lifestyle residences.

What are you looking for in terms of growth in Saudi?

Expanding our footprint in Saudi, extending further services to a growing market, and working on creating local national champions. These are groups that are transactable, and ready to attract meaningful investments from FDIs that would enhance the overall ecosystem that is laid out by the visionary leadership, and result in a more homogenous demographic. We at Gate are looking to play a pivotal role in supporting such initiatives, primarily in areas like leisure, real estate, logistics and industrials, which we believe are the basic infrastructure foundations, with great upside over the decades to come.

This will all be cemented through the establishment of our newly formed office in Riyadh that will be manned by local talent and supported by our transfer of expertise as part of our ESG programme.