Alistithmar for Financial Securities and Brokerage Company (Alistithmar Capital) is a major player in the financial services industry. The company offers a wide range of products and services such as wealth management, brokerage and investment banking. In recent years, the company has achieved significant growth in the AUM area with an expanded range of products and services and has achieved outstanding performance.
Set the benchmark
Alistithmar Capital’s retail equity funds significantly outperformed their respective benchmarks in 2020. This was a repeat of the outstanding performance of these funds in 2019. This success was the result of leveraging the research skills, fund management experience and dynamic investment philosophy of the company. In fact, Alistithmar Capital’s retail equity funds outperformed their respective benchmarks not only on an annual basis, but also over longer time horizons. These funds continued to generate significant excess returns in the three- and five-year categories (see Figures 1, 2 and 3).
The performance of the funds not only stood out against the respective benchmark, but also against their respective competitors. Alistithmar Capital’s flagship funds, the SAIB Saudi Equity Fund and the SAIB Saudi Company Fund, both ranked in the top quartile of their respective peers in 2020. Similarly, at the end of 2020, these funds also ranked in the top quartile categories for the three and five years, respectively, which shows the adaptive decision-making and consistent selection skills of the investment team.
A boost in business
In terms of company size, Alistithmar Capital saw a significant increase in the value of the assets they managed. The company’s assets under management increased to SAR 21 billion (US $ 6 billion) by the end of 2020 from SAR 5 billion (US $ 1 billion) in late 2017 (see Figure 4). Alistithmar Capital’s AUM increase over the reference period increased 298 percent, significantly outperforming the industry’s AUM increase of 56 percent over the same period.
In addition, the company’s ranking has improved from 13th place by the end of 2017 to 7th place by the end of 2020 in terms of AUM. This was also evident in Alistithmar Capital’s share of AUM in total AUM, which rose from 1.3 percent to 3.4 percent in the same period.
This increase in value and share reflects investors’ appreciation for the company’s outstanding performance and customer service.
Regarding the company’s real estate arm, Alistithmar Capital has successfully launched a number of private real estate funds that have provided their investors with a unique opportunity to participate in high quality real estate investments in Saudi Arabia. The most recent real estate fund launched was the Kaden Alistithmar Fund, with a volume of SAR 2 billion (USD 533 million), which invested in high-quality, income-generating real estate investments. The fund was fully subscribed before the end of the subscription period, reflecting investor confidence in the company.
The Saudi government launched the Financial Sector Development Program in 2017, which aims to develop the financial sector. With respect to the wealth management industry specifically, the program set out a number of goals such as increasing the value of assets under management, attracting foreign investors, and increasing investment products that Alistithmar Capital was able to develop a strategy from to capitalize on, such as an increase in the AUM and the product range.
With respect to Alistithmar Capital’s brokerage unit, the company successfully processed customer transactions of over SAR 70 billion (US $ 18.6 billion) annually during the 2017-20 period. In addition, the company was able to maintain its leading position in a growing market. The trade value of the Saudi stock market recorded an average annual growth rate (CAGR) of around 36 percent during this period. Despite this remarkable increase in traded value, the company was able to maintain its position in the top 10 in each of the years for the period in question.
In addition, Alistithmar Capital increased its market share in the United States over Saudi competitors, resulting in constant growth due to the company’s superior execution capabilities and customer service.
It is important to acknowledge the changes in the brokerage industry. The Saudi market reached an important milestone when it was included in a number of global equity indices (MSCI Emerging Markets Index, FTSE Russell Emerging Markets and S&P Dow Jones Emerging Market Indices) during the reporting period. This development led to an increased number of foreign investors and a significant increase in trading activities. Nonetheless, over the years, Alistithmar Capital has continued to build its capabilities to capitalize on such a trend, which is evident in the successful execution of the annual transaction value as well as the continuation of a leading position in the industry.
I’m looking forward to
The direction for the Saudi market is set for the coming years. The Saudi Arabian Capital Markets Authority, the Saudi Financial Markets Authority, recently announced its strategic plan for 2021-23. You want to develop the Saudi market further and make it an attractive market for domestic and foreign investments. The main pillars of this strategy are facilitating funding, encouraging investment, promoting confidence and building capacity. The plan offers many exciting details such as increasing AUMs as a percentage of GDP from 17 percent in 2019 to 27 percent in 2023, as well as increasing the number of entries annually.
This increase in value and share reflects investors’ appreciation for the company’s outstanding performance and customer service
Alistithmar Capital would like to use its expertise to develop its own strategies based on these strategic plans of the government so that it can not only benefit, but also respond more effectively to future changes in the Saudi financial market landscape. The company will continue to invest in people, processes and systems in order to serve an even wider range of customers.
It is Alistithmar Capital’s ongoing mission to create value for its investors by delivering excellence, increasing the value of assets under management, maintaining a leadership position in brokerage, expanding product offerings and refining the overall customer experience.
Meeting the expectations of current customers has always been a priority. To continue serving effectively and attracting new customers, Alistithmar Capital will leverage its current technological capabilities and, if necessary, introduce new technologies to refine and expand its reach. The company looks forward to exploring future opportunities in the Saudi Arabian financial markets.