Al-Faisal Holding: MEED assessment

24 October 2011

The general managers of Al-Faisal Holding subsidiaries are chosen for their expertise and given operational freedom and responsibility, allowing the holding company to focus on the overall strategic vision

It is a mark of Qatar’s growing corporate confidence that one of the emirate’s oldest private trading firms is able to embark on a global asset acquisition strategy, adding landmark hotels in major international cities to a portfolio that is likely to expand exponentially in coming years.

The W Hotel acquisition appears not to be a typically Gulf-style vanity play to build up prestige assets that do not contribute to the bottom line. With Al-Faisal Holding, there appears to be a concerted effort to engineer a balanced portfolio that is both highly diverse and capable of delivering growth.

The holding company structure looks to be successful in enabling its subsidiaries to operate with a measure of freedom, but it is also able to leverage the strong connections afforded by its royally linked founder, who is chairman of the Qatari Businessmen Association.

The general managers of Al-Faisal Holding subsidiaries are chosen for their expertise and given operational freedom and responsibility, allowing the holding company to focus on the overall strategic vision. There are no plans to shift the corporate structure or to turn the holding company into a joint stock operation. However, as with Aamal, there is always the option of going public with its subsidiary companies, as may be seen with Artic in the coming years.

One of the group’s key sources of strength is its location; Qatar has proven to be a model of how a hydrocarbons-rich Gulf economy can transform itself into something far more than the sum of its parts. Doha’s plans to become a knowledge economy remain a work in progress. But what is not in dispute is the Qatari economy’s impressive development, founded on rising natural gas revenues. If Al-Faisal Holding can build on its strong domestic footprint, and avoid getting caught out by ambitious overseas property plays, it is likely to embellish its credentials as one of the Gulf’s strongest private conglomerates – and one that may become better known well beyond Doha.

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