The Bahrain International circuit forms part of Mumtalakat’s portfolio

ecently making international headlines for its purchase of a 30% stake in U.K.-based automobile tech giant McLaren, Mumtalakat Holding was established in 2006 to take over the supervision of 33 state-owned companies, including Alba, one of the world’s largest aluminium smelters, Bahrain International Circuit and Gulf Air.

“Mumtalakat is not a sovereign wealth fund (SWF),” explains Talal Al-Zain, Mumtalakat’s CEO. “SWF are funds with excess liquidity that is invested all around the world. In Mumtalakat we already have the equity, which comes from government ownership of these companies. We are doing the opposite of the SWFs. We want to use our ownership to attract the private sector to participate in the companies we own. Our aim is to reduce the government’s participation, as we do not want to be the dominant owner of these companies. We aim to act as shareholders and investors, electing the management of these companies from the private sector”

Talal Al Zain , CEO of Bahrain Mumtalakat Holding

The grey area that this may produce – a private company driven to make money for the common good – is significantly aided by the credibility of Mumtalakat’s CEO, whose illustrious global career as an investment banker makes it clear that this is a serious company that intends to play by private sector rules. “Mumtalakat was created in June 2006, with the aim of taking over these companies from the Ministry of Finance. Our main objective was to improve their performance and make them more successful,” says Al-Zain. “In order to achieve this, it was agreed that Mumtalakat should be developed as a private company. So even though we are 100% owned by the government, we operate as a private entity. We are not part of the government and our staff is 100% private-sector driven.”

Transparency is important to the new agency, which undergoes auditing by the National Audit Bureau. All findings are published publicly. Al-Zain adds, “Mumtalakat was not created to be used as a political machine. We are purely an investment arm and we have nothing to hide. Fortunately, there is a very strong move to fight corruption and it is supported by the officials of the country. All of us are working to make sure that the companies are working comfortably and straight. That is one of the reasons why I was excited to join Mumtalakat, to be part of this new reform.”