What is the Mumtalakat Holding Company
The Mumtalakat Holding Company is a government-owned investment organization that manages the sovereign wealth fund for the Kingdom of Bahrain. The fund's deposits come primarily from surplus revenues from the development of oil and gas reserves in Bahrain.
BREAKING DOWN Mumtalakat Holding Company
The Mumtalakat Holding Company is managed by a nine-member board of directors composed of a mix of public officials and private sector experts. The investment portfolio consists of investment firms not related to oil and gas. The fund's holdings are concentrated on local and regional firms that contribute significantly to the economy of Bahrain. The fund is diversified across a variety of business sectors and holds majority stakes in several firms.
Building Wealth for a Nation
According to the fund's website, mumtalakat.bh, the idea took root in 2005 at an economic reform workshop by the Crown Prince of Bahrain. "Open to participants from ministries and government entities in addition to representatives within the private sector, the workshop focused on enhancing the private sector’s role in future economic growth in the Kingdom. There, a vision was launched to form the basis for the next phase of the national economic reform initiative," the website states.
As of May 2018, the fund held $11 billion in assets in a wide range of industries and nations, some 60 companies in 13 countries. The largest holdings were in real estate and tourism, followed by manufacturing and financial services, and food and agriculture. The fund said it provided over 13,400 direct jobs within its local companies.
According to its website, the "sovereign fund is a state-owned investment fund that is commonly established from balance of payments surpluses, official currency operations, the proceeds of privatizations, governmental transfer payments, fiscal surpluses, and/or receipts resulting from resources exports. The definition of sovereign wealth funds excludes foreign currency reserve assets held by monetary authorities for the traditional balance of payments or monetary policy purposes, state owned enterprises, government employee pension funds, or assets managed for the benefit of individuals."
Mumtalakat calls itself a self-sustaining operation. "We do not obtain any contributions from the government and seek investment options that will deliver returns in order to enable us to meet our debt obligations and help grow the wealth of the country."
"We continuously monitor our investment performance keeping abreast of our portfolio companies’ financials, operating performance, and fair value movements. Furthermore, we conduct various valuations as well as benchmarking and comparable analyses to ensure their growth is in accordance with our expectations," the fund stated.