At Bayt Al-Nomow Capital, we're more than just Financial Company. We're your dedicated partners in achieving financial success. With a rich tapestry of services, we bring together expertise in Asset Management, Investment Banking, and a range of other specialized Services offerings.
BNC was established in 2019, but no operation was there in the company until new shareholders acquired the company in late 2022 when the company started operation after the acquisition. The company started operations in late 2022. I was recommended by the new shareholders acquiring the company to come on board and be the CEO of the company as a transition for their acquisition and to manage the company post-acquisition.
When the acquisition was completed in October 2022, I started building the company's team and activating the license because the license was dormant with the Capital Market Authority. We used to have three licenses: asset management, investment banking, and advisory. I canceled the advisory license and concentrated on asset management and investment banking. I started building the pipelines and the flow of the company.
In two and a half years, we have launched four funds, three public equity funds, and one private equity fund. We have close to 10 funds in the pipeline. Some of the funds have been approved by the Capital Market Authority, and we are in the subscription process; others are still in the structuring phase. The three public equity funds are different in one way or another. The first one was an aggressive freestyle public equity fund.
The second one was a closed-ended fund targeting companies in the small market, which is called Nomu Market in Saudi Arabia. We have an eye on companies that are upgradable to the main market. So, we achieve high returns. Historically, most of the companies have been upgraded from the Nomu Market to the main market. They achieved at least a 100% upside in the company's value. So, this is why, in the second fund, we have an eye on those companies that are eligible for the upgrade.
The third public fund is different in a way since it allows people who have portfolios to participate in the fund using their existing shares. If they have a portfolio, they don't need to sell the portfolio, and then invest in the fund. No, they swap their portfolio directly to the fund. The first fund was an open-ended fund. The second was a closed-ended fund. The third is open, but different in accepting swaps of existing portfolios. We have a fourth fund that is submitted to the Capital Market Authority, but it is exposed to the Arabian stock market fund. It'll allow us to invest in other countries in the region like the UAE or Egypt. On the private equity side, we managed to launch a very successful fund called Saudi Turnaround Fund Staff One
This fund was targeted to invest in companies that needed a turnaround in their operations and financials. Sometimes you have a company that is successful in operation, but they might need some financial structure, or you might find a company that is very well off financially, but they have a wrong operation model. So, we invest in these companies no matter what sector they are in, and we make the turnaround. The first target that we acquired was a manufacturing company producing aluminum cladding.
This company was operationally successful, but they had some financial problems. So, we invested in the company, and we swapped the asset completely to the fund. We freed some cash from wrongly utilized assets like the inventory, and we managed to free some cash from the receivables through efficient collection efforts. We managed to optimize capacity utilization. We managed to have the company's bottom line increased from 8 million to 19 million in one year. We signed the share purchase agreement and share versions agreement earlier in the year 2023.
However, the actual acquisition happened in November 2023. So, by the time we acquired the company, we were helping and advising them to improve their profitability. We closed the year, one month after the injection of our money achieving the 19 million versus the 8 million that we acquired the company based on which--two weeks ago, we distributed cash dividends for the investors. After performance and management fees, we distributed a 15% cash return on their investment. We are in the process of making a reevaluation for the fund assets, which will be based on the new numbers that will give more than double the Net Asset Value (NAV) of the fund. Our investors are very happy with having 15% cash, and a 100% expected increase in their networks through the NAV in our fund which we will be doubling in.
We are acquiring a paint factory that will integrate with the existing business of aluminum cladding. It'll increase profits by at least five million. And we are moving both together into a new complex in MODON, which are industrial cities managed by the country. We are moving into a new complex that is over 30,000 square meters assigned by MODON to the paint factories that we are acquiring. BNC has a very good success story, and we plan to list the company either in the Nomu market or in the TASI market, which is the biggest stock exchange market.
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We focus on all sectors because we structure a single-asset fund. For every opportunity, I have a single asset fund for it. For example, this aluminum cladding is under the Saudi Turnaround Fund One. So, I can have Saudi turnaround fund two, or three. Every fund is a single asset fund. So, it owns only one business. For example, if I have an educational fund called iCRA, this fund will be for schools. I will acquire one, two, or three schools but not any other different business. So, all businesses are symmetric.
You can have synergies easily between business opportunities if it is in the same business activity. We have a beef meat trading company and a sheep meat trading company. And we have a building material factory, which is the Bitumen, and it focuses on materials used for roads and so on. We also have a very good fund called the Saudi Tech Fund. This fund is in collaboration with a listed company in the Saudi market called KnowledgeNet. We are in the process of acquiring four companies partially or 100% owned by KnowledgeNet, and it'll be completely swapped into the fund.
In the upcoming years real estate will still be a very prominent area of business development and making money because of the upcoming expo, World Cup, and the Asian games they are turning Riyadh into a metropolitan city. This would attract more people from surrounding governments in the country. Apart from real estate the tech and FinTech business have already evolved, but it's still growing. The food aggregators business is now huge.
20 years ago, nobody imagined that you could call the restaurant itself. When you work on upgrading the quality of life, it would create good opportunities for GDP growth and business in the country. If we compare Europe and America, with the Middle East 10 or 20 years before, you can notice the difference in the quality of life, but this difference creates opportunities to upgrade life. So, when you upgrade the quality of life, you create more business opportunities. There is still a big gap in developing the quality or upgrading the quality of life that will give more business opportunities for local investors and international ones as well.
Our investors are all local. Given the size of our company and the small tickets that we are working on we are targeting ultra-high networks individuals. In the beginning, we started with the ultra-high networks’ individuals but later on, we will approach institutional investors because our fund size will be different. On the other hand, we have the investment banking business where we are only targeting big corporate companies. We have closed more than 10 transactions with arranging activities for corporates working in the fields of logistics, furniture, cartoon and packaging material, restaurants, construction, and landscape companies. We have achieved in these sectors some transactions, and we're working on some now, but for now, our investors are mainly high-network individuals who invest in our funds. We have another activity like portfolio management under asset management. We have institutions that give us their DPMS to manage.
Through direct corporate access, our connections in the markets, and we have a wealth management team who select targeted people and arrange direct meetings to explain our business and performance.
We have portals for every sector, like the contracting sector, we go to informational database portals and websites. We bring all the information about contracting companies. So, we have a full booklet about all the contracting companies, pharmaceutical companies, retail, and restaurant companies. We take it sector by sector.
We make calls and offer our services. This is the first level team of business development and when they do this, they raise flags about this company that needs financing. We can arrange bank finance for some-- some companies have everything under control, but they don't have good expertise onboard like a strong CFO to handle the bank facilities and the optimal capital structure for them. So, we offer them our arranging service activity so that we can help them with this.
We can find that these companies need a capital injection so we bring them an investor on board. For example, if we find the company needs an investor, we first identify do it needs a strategic investor from the industry or just a financial investor. If they do have all the expertise, or they need more money to expand the business, we can arrange it, or we bring them a strategic investor, then it'll be, or he will be part of the management team.
They come to us because we have the opportunity. We are working now on a big transaction for the food processing business. So, I have the opportunity and a mandate with the company. When I approach potential investors, they will come and listen because they need this opportunity. In investment banking activities, there are two types of mandates; buy-side mandate and sell-side mandate. If you are looking for a buy-side mandate, you as an investor, need to give a buy-side mandate to BNC or any other big investment bank in the country.
You will select the big investment bank because you are giving a buy-side mandate until you know someone like BNC and you trust their experience and their teamwork, then you can consider them. But for the sell side mandate, it is BNC who originates the opportunity. For the sell-side mandate, everybody will come to us because we have the opportunity. We are very active in the market in exploring opportunities. In investment baking, if you approach 10 companies, and you have one mandate, you are very successful. If you close one out of each two mandates you have, you are excellent. So, this is why we exert effort.
We have a filtering process. Our team makes assessments, and it takes a huge effort without any payback. When you approach a company you assess its business valuations, and discuss all of these with them until you have the same expectations about the company's value and the company's potential for growth. We need to have a match between our expectations from an advisor's eye and their expectation as a business owner. So, if we have a match, then there is a mandate. Having a mandate does not mean that we have closed the deal. We still need to explore the potential buyer and investor, but this is the effort that we make in the beginning before getting the mandate signed, and then we have to exert our effort to bring the investor.
We have public equity funds and private equity funds. What we still need is real estate funds. The investment domain has been technically segregated or allocated into two mainstreams; public equities and alternative investments. In the alternative investments, we do have private equity funds until now, but we plan to expand into the two main items in the alternative investment, which are the fixed income and hedge funds along with real estate. We will be getting this on board in early August next year.
For the fixed income and the other types of alternative investments, we are hiring someone who will hit the fixed income business. Early next year, we'll increase our capital. So, we'll be eligible to get the real estate license from the Capital Market Authority. We have started getting internal approval for credit limits based on the new capital increase before the capital increase happened. Once we had the capital increased a business was already booked, so this is what we are now doing in the real estate business. We started engaging in real estate transactions but from the arranging license, I came to you, you are a real estate developer. I sign with you an arrangement contract to help you establish a real estate fund.
We already have our first one done. So, once we have contracts like these and real estate funds with others, we use other capital companies, investment banks, or asset managers to use their licenses to manage the real estate fund. We have already started exploring the real estate business and we have some engagements. Early next year, we'll increase our capital to get the real estate license. We already have the business there.
We want to work on establishing real estate funds. If you have a strong relationship with the developer, there are many landlords, but where is the developer who has the creativity to turn this piece of land into an investment return? For example, it's very difficult to sell a piece of land worth 1 billion. Most of the developers are creative, but without them, you cannot develop your land if you are the landlord. So, by having a relationship with a developer you can create an opportunity with the landlord. Given the very successful real estate development business in Egypt over the last 20 years, Saudi Arabia is welcoming real estate developers from Egypt. Most of them are coming to Saudi Arabia to start their business in development. Being an Egyptian myself and having very good connections with the Egyptian market, most of them are first approaching me before they come and invest. So, there would be good opportunities with big real estate developers from Egypt to start businesses along with us in the country.
We plan to expand our operations to Egypt and the UAE. We'll start our public equity fund which is the Arabian Stock Market Fund and we will invest in Arabian markets, including Egypt and the UAE.
Olaya Road - Olaya District Building No. 6217, second floor
Office No. 201 & 205
Riyadh, Saudi Arabia
