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Daman Investments sets 2012 IPO target

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42950-ShehabGargashIn 1998 I attended the launch press conference for Daman Investments and thought then that this group, and particularly its managing director Shehab Gargash, possessed the magic touch.

A little over a decade later and Daman has $1.5 billion under its management. Today the group announced its three-year strategy to hold an initial public offering in 2012.

Success formula

There is no doubt in my mind that it will get there, and that whoever is the unnamed strategic investor who is putting in $27 million now is going to be a happy man or woman. Some firms and families have a lucky streak, or is it just hard work?

Actually in investment management it is probably as much about good judgement and Daman has won appreciation for its consistently above average local fund performance.

However, not holding this IPO until 2012 seems to say something about the outlook for local markets, whatever the group may say about taking time for phased expansion of core divisions and corporate governance.

Mr. Gargash told ArabianMoney.Net local markets face a ‘tough year’ in 2010. He thinks recently volatility may be a signal that markets are about to take another dive.

For an astute and opportunistic operator this may of course present as many opportunities as it does problems. But no doubt Daman would be holding its IPO much sooner if it saw an earlier window of opportunity as likely.

In the meantime, an IPO target offers a useful focus to the group and a guiding light in difficult markets. It is also a way to attract investors to private placements and to garner positive press attention.

Raising funds

Mr. Gargash says he is close to raising a further $54 million from investors and would like $81 million in 2011 just before the IPO run-up. He currently values his business at $240 million, not bad for 11 years since the start-up and after the global financial crisis.

Even the firm’s exposure to the Dubai property market through its office block in the Dubai International Financial Centre has been handled well, with the building coming up for completion and substantially paid for already. As the stalled cranes on some tall buildings in the DIFC reveal not all have been so lucky.

So it is going to be interesting to watch Daman Investments over the next three years in its pre-IPO phase. But nobody is expecting an easy ride, and certainly not Mr. Gargash whose humble approach to markets is no doubt one of the secrets to his success.

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Written by Peter Cooper

November 3, 2009 at 1:23 pm

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