31 March 2013 – Oman Fixed Income Fund (OMFI), the largest Omani fund of over RO
100 million, announced another year of record operating and financial
performance in 2012. With two distributions during 2012, the Fund made
annualized distribution of 8.9 per cent on its paid-up capital in the year.
During 2011, the Fund had made annualized distribution of 7.7 per cent of its
paid-up capital. The objective of the Fund is to generate return above long-term
fixed deposits and the Fund has been successfully achieving its objectives since
inception. The Fund is the only fund in the region with a mandate to invest in
subordinated/ mezzanine securities.
the recently held meeting of the Fund Management Board, the board members
approved the audited financial statements for year 2012. Sulaiman bin Mohamed
bin Hamed Al Yahyai, Chairman of the Fund’s Management Board, said “The Fund has
performed well for the second year in a row. In 2012, the net profits of the
Fund registered an increase of 23.2 per cent over FY 2011. Further, the Fund
undertook 2 new investments recording increase of more than 100 per cent in its
investment commitments at the end of 2012.”
Bank Muscat managed Fund was launched in late 2010 and focuses on investments in
subordinated debt securities of Omani Companies. The fund aims to develop the
underserved subordinated debt market in Oman and has been well received by both
investors and investees alike.
bin Mohamed bin Hamed Al Yahyai further added, “We are pleased by the Fund’s
overall performance and impressive distribution track record since inception.
The Fund was conceived in 2010 keeping in mind the then difficult market
conditions. It offers an alternative investment option for investors and an
attractive source of funding for Omani companies who have historically raised
capital from traditional debt and equity. Since the launch of the Fund in 2010,
the Fund has successfully achieved its objective of delivering superior returns
than those offered by conventional fixed income/ savings products such as fixed
financing has been globally utilised as a funding source to replace equity
requirements. Corporates opting for subordinated debt funding enjoy substantial
savings in comparison to the higher cost of equity. This also leads to
enhancement in return on equity and thus significant value creation for the
shareholders of these companies without any dilution in control. Investors too
benefit from higher yields than conventional fixed income/ savings products such
as fixed deposits.