Obediah Ayton is a professional investor relations expert based in the United Arab Emirates. He is the founder and managing director of Dhabi Hold Co. based in Abu Dhabi. Obediah Ayton is considered one of the best leaders in investor relations management in the Middle East. Ayton’s exclusive connections lie within the United Arab Emirates, and in this 3 section article, Obediah Ayton introduces his ways of raising capital from the UAE vs. New York.
1. Making the Middle East Case
Unlike most North American deals, it is not uncommon to have to present a case for a deal on its far-into-the-future merits and its strategic value for the UAE nation’s people. Three of the venture financing efforts I have worked on over the last few months involved exactly this: “Show me the deal that will be my family’s new business for the next century.” The same holds true for presenting a deal to sovereign wealth funds. These organizations may “talk” traditional banking and capital raising language, but at their core (and in closed-door investment committee meetings), they answer to the rulers of their nations who do not care much for financial returns.
2. Creating the right deal process:
To most UAE investors, proximity is important. International and emerging market investors are unlikely to approach an opportunity like an American or European investor where the deal gets done via virtual data rooms and a few one-day visits. It is a face-to-face discussion on their turf, showing up constantly. In UAE settings, there is typically a longer period of senior-level discussion of the merits, the execution and operating risks, the value dynamics and the international politics of the deal, and then a shorter period of discussion on price and terms. In many instances, pricing is less important, but protection of reputation is.
Expectations regarding timing also need to be managed. The time to arrange cash in non-traditional settings is longer as most investment groups are holding structures and not liquid external accounts. Relative to North American investors, most UAE Family Offices, for example, are a little more illiquid and require months, not weeks, to arrange cash for closing. Knowing that UAE investors can rarely move as fast should be factored into creating the right deal process.
3. Adopting the right deal style when styling, not Substance:
Adapting to the UAE style is not difficult if the capital raising team has someone who knows the investment preferences, the capital constraints and the risk tolerances of the target foreign investor. If we have situational awareness, we know what maneuvering options are available.
However, even with situational awareness, there are aspects of diplomacy, beyond-the-deal thinking, and mature poise that can matter as much, if not more, than spreadsheets and legal documents. How style plays such a major role is first a matter of language. When bankers are talking to bankers, they can usually find common ground and a common language such that a deal can get done. When bankers talk to billionaires, heads of families, ministers, and heads of state, it is far more difficult to find common ground. Image a non-international 40-year-old, fast-talking Wall Street Banker sitting down with a 92-year-old, Forbes Top #10 wealthiest, Saudi (who incidentally built the largest Islamic Bank in the world). The chance of a deal discussion getting beyond the first round was almost zero.
To learn more about Dhabi Hold Co, visit www.dhabiholding.com.
