Adding innovation to investment

'We, as the private sector, often look to the government and the visionary leadership for direction,' says Khalid bin Kalban, CEO of Dubai Investments.

Khalid bin Kalban, managing director and CEO of Dubai Investments, wears several hats, including chairman of Al Mal Capital and Marka, and is on the board of many firms such as National General Insurance Company, Thuraya Telecommunication, Takaful Re, First Energy Bank, The Islamic Bank of Asia and Arcapita Investment Management, among others.
A quick look at his illustrious portfolio is enough to give you an idea of just how busy he might be. Despite that, Bin Kalban has an open door policy when it comes to anyone interested in a business meeting.
"I don't shy away from people asking for a meeting, however busy I might be. Because I see it as an opportunity to learn something new," he noted.
"People come up with a lot of creative ideas, and I make sure I speak to them about those. From those ideas, something will transpire. it could [even] be a trend of the future." This is something he advises more business leaders to adopt. "Even if the person asking for a meeting is from a field that has nothing to do with yours, something might come up during the meeting that can be taken forward.
"Ideas travel and since we in Dubai are exposed to so many different sectors and because of our proximity to different markets, you can be certain that there will be a lot of good exposure if you simply talk to different people. Looking back, I have reviewed over 300 projects that are worth billions."
Speaking at the 'Meet the CEO' session at Khaleej Times' head office, Bin Kalban looked back on a long and successful career at Dubai Investments, and shared his ideas on business excellence.
Opportunist shopping
"Many people came and asked me about my strategy when we started this endeavour, and I always told them that the strategy has been about being opportunistic," he said. "Having said that, statistics will show you that if you are a venture capital company, 90 per cent of your projects and investments will fail, with only 10 per cent being successful and compensating you for the failures."
However, in the case of Dubai Investments, the situation is completely reversed.
"Over 85 per cent of our projects have been successful, and the secret is dedication and looking at the details," the CEO revealed. "Talk to a lot of people, consult with experts, study your business to see what you are missing and then act accordingly. In addition, it is important to have a hands-on management approach. Dedicate yourself to your endeavour, no matter what the difficulties are."
Asked about staying motivated and keeping track of change, he said: "You have to like what you do and devote time and effort to it. You also have to be vigilant and monitor conditions constantly. Change might come from the US or Europe, but you can be certain that within a year's time, it will have reached the Middle East; so it pays to be prepared. If you have had exposure as a businessman, then you will 'feel' the change coming."
Bin Kalban also noted that it is easy enough for a company to grow during periods of economic prosperity, but things become difficult when the focus has to be shifted towards maturity.
"It is important to diversify; different times require a different mentality and different investments. Focus on having a diversified company, with a vision to grow."
"I started my career with the central bank and remained there for about nine years," Bin Kalban noted.
"Then I was sent by the Dubai government to Singapore for four years. It was during that time that the idea came up to establish something similar to what we know today as Dubai Investments. There were really three reasons for us to create Dubai Investments: the first was to create investment opportunities for UAE citizens, the second was to diversify the UAE's economy in general and Dubai's economy specifically. The final reason was to focus on the manufacturing sector in Dubai."
There was a lack of expertise when it came to establishing manufacturing bases in the UAE, especially when it came to long-term investments, he noted. Bin Kalban wanted to create a unique institution where the private sector took the lead.
"We did a lot of research, including a major study by the International Monetary Fund in the early 1990s that concluded that UAE citizens were saving very little and their investment opportunities were very limited," he said.
"When we set up, we looked closely at places like Taiwan, Hong Kong, Malaysia and Singapore to see how private and semi-government companies are helping to develop the country. We started with a paid-up capital of around Dh650 million. The focus was manufacturing since there was no major manufacturing base in Dubai."
Thus was born the concept for Dubai Investment Park (DIP).
"However, that was not all," said Bin Kalban. "The concept was to create a city within a city, which will have manufacturing, logistics, staff accommodations, schools, hospitals and everything else that residents will need within that 32 square kilometres of space. Our focus was on creating new initiatives and something that was different from all the manufacturing units that were already present; we didn't want to directly compete with them. I would say that 15 out of the 18 manufacturing units that we have under the company right now are classified as startups."
To complete the picture, Masharie, a venture capital company which identifies and invests in the equity of existing or new businesses, was established. "In around seven years, we got involved with 23 companies and helped them to grow and flourish," he said.
The Dubai model
Today, Dubai Investments has a paid-up capital of Dh4 billion and total assets valued at around Dh16.4 billion as of Q2, 2017. The company's assets in real estate during the same period stood at Dh10.8 billion, while assets in manufacturing were around Dh2.9 billion.
"If you look at the case of Dubai Investments, it is a classic case of how Dubai operates," Bin Kalban said. "Dubai doesn't shy away from the impossible. People might say something can't be done, but in Dubai, it successfully happens. This is one of the reasons that Dubai and the UAE is flourishing."
He added: "We, as the private sector, often look to the government and the visionary leadership for direction. Once we have identified a pattern, we follow it with the creativity of the private sector. We try to compliment whatever initiatives have been launched by the government. We have not tried to imitate other developers. Our focus remains on new initiatives, new companies and new startups from Dubai and the rest of the UAE. We tracked a lot of companies from not just the UAE, but also from the GCC, the Subcontinent and the rest of Asia. Our timing was really perfect, as the growth of Dubai helped us a lot in our own mission."
- rohma@khaleejtimes.com