Globally, investors are seeking access to fund managers capable of returning at least 3x their capital, while startups are seeking patient value-add investors. Creating a nexus point for capital is both an art and a science.
While investors of all varieties have begun to increase their capital allocations to the venture capital asset class, there continues to be significant demand for knowledgeable intermediaries. Abdulaziz Hayat argues that investment selection is not the duty of new investors in the asset class, but rather, new LPs should back emerging managers with the investment acumen necessary to construct a quality portfolio.
A Kuwaiti entrepreneur, Abdulaziz Hayat, earned his undergraduate degree in Economics from the University of San Diego. After that, he enrolled at the prestigious Harvard University in Massachusetts where he would later earn a Master of Liberal Arts in Finance.
Having worked in the international technology investing environment, Abdulaziz shares a few compelling conceptions on MENA, its investors, and the US startup ecosystem.
Hayat’s Crucial Insight on MENA Investors
MENA, an acronym, stands for the Middle East and North Africa. Hayat, hailing from Kuwait, possesses a zoomed-in, intricate perspective on the investment and business climates in MENA and the US. His experience suggests that MENA investors are more inclined towards low-risk cash-flow generating assets, including real estate, bonds, and blue-chip equities.
Owing to the uncertainty caused by the COVID-19 pandemic, local investors in MENA witnessed unprecedented fluctuations in their real estate and bond portfolio returns. However, the one sector that not only continued to thrive but flourished under these chaotic waves was technology. It remained a source of portfolio strength for all international investors. This has piqued the interest of even the most conservative MENA institutions.
Hayat adds that now, investors are willing to become more and more patient in order to reap greater multiples on invested capital in the long run.
He recounts how earlier, MENA investments in the US startup ecosystem were reserved for giant sovereign wealth funds. Smaller family offices simply resided out of this landscape. But, both small family offices and high net-worth individuals demand exposure to this high-growth asset class now that the fear of missing out has become universal.
To bridge the gap, Abdulaziz is working relentlessly with US early stage ventures and investors from MENA. He is introducing smaller family funds to emerging managers in the US seeking new Limited Partners. Fostering and growing long-term beneficial relationships remains a primary objective.
As Abdulaziz elaborates, “Many MENA investors favour investing in individual high-growth startups, but this is tough without being an existing early investor with guaranteed pro-rata rights”. He strives to ensure that they are early investors in a variety of new managers and their portfolios. “It’s a pay to play relationship”, says Abdulaziz, “if MENA investors want front row seats during growth rounds, they’ll have to be indexed very early on in the seed and pre-seed stages via various funds.”
Abdulaziz, who has been on both sides of the negotiating table as both an entrepreneur and investor, is well aware of the financial needs of both parties. Providing timely capital to one side and adequate returns to the other is a balancing act in need of constant refinement.
His professional holdings retrieve an encompassing, all-pervasive experience in both fields.
Sketching Abdulaziz’s Strong Career Trail
Hayat’s interests rest primarily in overseeing investments and conducting entrepreneurial activities with regards to capital allocation. His career path is a direct testament to his various achievements.
After completing his graduate program at Harvard University, , he took up the role of Intern in Investment Banking at G2 Capital Advisors, researching the trends of the market to equip logistics, industrial, aerospace and defence deal teams. He devised strategic alternatives for distressed energy companies, in addition to advisory and restructuring mandates in a variety of verticals.
Later, he became a part of NBK Capital in Kuwait, serving as a Senior Analyst in Investment Banking. Here, his notable work includes Healthcare M&A, the IPO of a notable heavy asset leasing business in the energy and construction space, and the issuance of Kuwait’s first ever Global Medium Term Note Programme
In September 2017, he began heading investment operations at Faith Capital in Kuwait, supervising various memorandum preparations, due diligence, and portfolio management. He managed VC investments in consumer and enterprise startups as the highest-ranking full-time employee at the organisation. He also negotiated and drafted equity and convertible debt investments in various legal jurisdictions. Hayat also acted as an Investment Committee member on behalf of the firm, a board member at two portfolio companies, and an informal advisor to several founders.
Hayat’s impeccable fluency in areas of strategy, product, fundraising, investments, and value addition is an outcome of his remarkable experience.