Abu Dhabi Investment House (ADIH) reports net profit of AED260 million (US$71 million) for the fiscal year 2008:

• Total income – AED427 million (US$116 million)
• 40% cash dividend distribution to shareholders 110% Return on Capital
• Capital increased by 87.5% Achievement include: Al Arabi Private Equity Fund final exit (20.2% IRR); Porta Moda concept launch; expansion to Europe, North Africa and Asia

Abu Dhabi, UAE- Abu Dhabi Investment House (ADIH) Chairman of the Board, Jowa’an Awaidha Al Khaili announced yesterday that ADIH made a net profit of AED 260 million (US$71 million) for the fiscal year 2008, an 18% year-on-year increase from AED220 million (US$60 million) in 2007. As such, the Board has approved the distribution of 40% cash dividend (AED0.40 per share).

Making an official statement, Mr Al Khaili said ‘We are very pleased with the 2008 exceptional results, despite current market conditions. This is attributed to clear strategy and business model focused on identifying unique investment opportunities for growth in new sectors and markets, including North Africa, Asia and Europe. Extensive research and due diligence coupled with a strong relationship with our investors and governments where ADIH operates, are all vital factors in our success.

This fiscal year’s results reflect ADIH expansion into various diversified sectors and markets. Total income for 2008 is at AED427 million (US$116 million), a 36% year-on-year increase over AED315 million (US$86 million), achieving a net profit of AED260 million (US$71 million) compared to AED220 million (US$60 million) recorded last year. The balance sheet grew impressively to AED1,542 million (US$420 million) – an increase of 81% when compared to December 2007’s AED853 million (US$232 million). This reflected strong business growth driven by an increase in client investments in ADIH overall funds and projects. Total equity for 2008 rose by 63% reaching AED 984 million (US$268 million), recording AED 1.27 (US$0.35) earnings per share in comparison to total equity of AED605 million (US$165 million) in 2007 with AED1.10 (US$ 0.30) earnings per share.

Mr Al Khaili stressed, ‘during the past four years, ADIH has succeeded in establishing a solid and strong base of investors and shareholders. Additionally, its expansion into new geographical areas within various sectors, introducing new investment opportunities and products including strategic partnerships with regional and international organizations are important elements in ADIH’s success.

I would like to take this opportunity to thank UAE Central Bank, Ministry of Commerce, all our stakeholders including our valued shareholders, investors, ADIH executive management and employees for all the support and hard work that helped achieve these great results.

Rashad Janahi, ADIH Managing Director, said, “Our exceptional 2008 results further demonstrate ADIH's fast and steady growth in light of the Board’s clear strategy, as we continue to diversify our portfolio and seize major exit opportunities where possible. All this, despite current strained financial market conditions. ADIH risk management tools, complemented with extensive market study and a team of experts, further assisted in making ADIH products more attractive to investors and successfully positioning ADIH as a major player in the regional market.’

2008 Achievements

Capital Raise and Shareholder Equity increase
During 2008, ADIH welcomed a new group of select institutional investors where ADIH succeeded in raising its capital and increasing its shareholder equity to a total of AED 984 million (US$268 million). This will assist ADIH in further implementing its studied plans to enter new markets and sectors.

Al Arabi Private Equity Fund – successful final exit with an IRR of 20.2%
ADIH made a final exist of Al Arabi Private Equity Fund, generating an overall Internal Rate of Return (IRR) of 20.2%, compared to a projected 20% promised to the Fund’s subscribers when the fund was launched in 2005.

This announcement comes 30 months earlier than the expected date of exit. Two partial exits for Al Arabi Private Equity Fund were already announced during the year: first partial exit of an IRR of 25% (31 December 2007); second partial exit of an IRR of 22% (30 April 2008).

The Fund invested in a diverse range of GCC private equity positions, including underlying investments in a variety of economic sectors. The steady stream of deal opportunities ADIH has access to, allowed the Fund to select from a wide range of investment alternatives enabling it to achieve a balanced portfolio with optimized returns and diversified risks.

Given ADIH’s successful exit strategies, starting with the Lagoon Fund exit towards end of 2007 with an ROI of 30%-- compared to an expected ROI of 27.5%, and the Al Arabi Private Equity Fund exit, ADIH is currently studying the introduction of Al Arabi Private Equity Fund II to continue achieving enhanced returns for its investors.

New Funds Launched in 2008:

Al Joud GCC Listed Equities Fund
Al Joud, the new GCC Listed Equities Fund launched early 2008, invests primarily in listed securities issued in the GCC countries, in accordance with Sharia’a Investment Guidelines. The fund was designed to re-invest dividends back into the market. With the successes the fund was achieving ADIH issued of second-class shares early 2009 that will now be paying out cash dividends instead. This comes after due diligence confirmed timing as an excellent time to invest within the GCC as valuations are very attractive while the fundamentals of GCC economies and prospects of blue chip companies that Al Joud invests in are very sound.

Launch of India Entertainment City Fund
In 2008, ADIH announced the launch of its India Entertainment City fund, a USD400 million Shariah-compliant fund that will finance India Entertainment City’s infrastructure, planned to be developed in India’s newly announced Mega City in Navi Mumbai. The fund, closed in record time, has an investment period of two and a half years and is expected to achieve a 75% return on investment (ROI). The new project is based on ADIH’s innovative Entertainment City concept, the first of which is currently being implemented in Qatar. The concept is a mixed-use development comprising residential and retail components with a focus on family entertainment. India Entertainment City fund comes after the successful launch of Qatar Entertainment City, a US$ 3 billion project launched by ADIH and implemented in Lusail, Qatar through a US$500 million infrastructure fund launched in 2007. Qatar Entertainment City was successful in attracting strategic partnerships with UAE-based Majed Al Futtaim Group (MAF) and Kuwait-based United Development Company (UDC). Also, in November 2008, Qatar Entertainment City announced that the first Six Flags in Qatar will be implemented on its premises in the Entertainment cluster to target family and GCC tourism to the area. The projected return on investment (ROI) for Qatar Entertainment City is 60%, with a projected annual IRR of 20% for sub-developers. The development promises to be a regional hub for luxury living, leisure and entertainment. Qatar Entertainment City infrastructure will be among the first to be completed in Lusail, Qatar.

Porta Moda Marrakech fund
In mid 2008, ADIH launched the Porta Moda Marrakech fund with a value of US$ 230 million to fund the US$400 million project in Marrakech, Morocco. The inauguration of the project took place during November 2008 in Marrakech, attended by a high-level delegation of the Moroccan government. Porta Moda Marrakech is the first of the Porta Moda (style city) concept that was launched in April 2008 by ADIH aiming to seek and attract international brand names in the style, design of fashion, jewellery, furniture and luxury living from both academic and retail aspects to create style and design hubs in select emerging markets. The Porta Moda concept will be implemented in Abu Dhabi, Qatar, Morocco, Tunisia and India. This first of its kind concept is a mixed-use development comprising residential and retail components while focusing on fashion and style. The ‘city’ will feature a grand fashion district containing premium and luxury brands in the fashion, jewellery and interior design fields; an educational district containing institutions for the same, as well as museums and exhibition centres; as well as, a residential and a leisure district with town houses, studios, luxury villas, cafes, restaurants and renowned boutique hotels and spas.

Record Sales and International Recognition
ADIH’s US$ 90 million water-front Porta Reef project in Bahrain achieved over 85% record sales of its units to investors and homeowners. Whereas its US$ 100 million Sunset Hills project located south of Bahrain also achieved almost 80% sales.

Additionally, ADIH received the international CNBC Arabia Award for Best Development in 2008 for its Qatar Entertainment City project. Where the 3-day event in its commercial project, The Lagoon won the IVCA Award for Best Event in 2008.

Strategic partnerships

Vision 3 Alliance
In addition to ADIH’s partnerships with relationships with various organizations throughout the international market, in September 2008, ADIH along with Gulf Finance House and Ithmaar Bank of Bahrain, announced the ‘Vision3’ alliance. This entity is mandated to develop funds and projects within the following 3 sectors: Agriculture: Agricap fund; Infrastructure: Infracapital; and Hospitality: Hospitality Development Fund.

Entry into China
In 2008, ADIH began exploring the Chinese market for investment opportunities. This lead to forming initial alliances with reputable Chinese firms.

Global Citizenship – World Economic Forum’s Global Growth Companies membership
During 2008, ADIH became an official member of the Global Growth Companies (GGC), an off-shoot community established by the World Economic Forum. The Community of Global Growth Companies is based on the premise that visionary companies can expand more rapidly than at any time in history, helped by new factors such as global financing, instant communications, rapidly scalable technologies and integrated logistical networks. In this environment, an increasing number of new players are building a global reach and competitive advantage. This group of highly influential companies is reshaping the global business landscape. While Global Growth Companies do not have the size and international reputation of traditional multinationals, they succeed through speed, flexibility and constant innovation. Some of the key indicators of these companies are: Growth rates exceeding 15% year-on-year; Revenues typically between US$ 100 million and US$ 2 billion; and Demonstrated leadership in a particular niche or industry.

Members of the Community have the opportunity to network and share experiences with each other as well as with the greater Forum Community. Of special note is the Community’s ability to work with a select number of the Forum’s Strategic Partners, the GGC Community Partners, to get insights and guidance on such topics as managing risk, strategic growth, branding and talent management. Together they will address the most pressing issues facing rapidly growing companies in their efforts to go global.

Corporate Social Responsibility
ADIH is a strong contributor to the community. In its four years, it contributed to the following community activities: Events for individuals with physical disabilities; Zakat and raising awareness of the practice among the business sector within the UAE; Children-related activities; and Charitable causes.

2009 ADIH Strategy and New Sectors
ADIH will continue to expand geographically where opportunities are present as well as diversify its portfolio to include innovative and unique investment opportunities and tools. This includes entering sectors such as: clean energy and pharmaceuticals. Additionally, ADIH is studying the launch of a fund to acquire distressed assets which will eventually have a positive performance once the global economic situation stabilises.