Key Takeaways
- • bfinance opened a Dubai office in March 2024 to support and grow its Middle East and Africa client base, the firm's 11th global location.
- • The Middle East and Africa region currently accounts for about 20 per cent of bfinance's total business revenue, and Dubai office head Alex Denby hopes it can rise to as much as 30 per cent.
- • Under 10 per cent of bfinance's Middle East clients are family offices, while about 20 per cent are wealth managers, which Denby sees as significant upside.
- • bfinance's revenue model charges winning fund managers a pre-agreed one-off fixed basis point fee, so its compensation does not depend on which manager a client selects.
- • Clients in the region are renewing interest in equities and private markets, with Shariah-compliant investments an important consideration, while risk appetite has not risen.
Summary
Independent investment consulting firm bfinance set up an office in Dubai last month to support and grow its Middle East and Africa client base, according to a report by this news service on April 15, 2024. The regional business currently represents about 20 per cent of total revenue, and managing director and Dubai office head Alex Denby hopes that share could rise to as much as 30 per cent. A decade ago, the share was closer to 10 per cent. Denby, who joined the firm 12 years ago, said the business wanted to be physically closer to clients, adding that Saudi Arabia is where the firm sees the most activity.
Founded in 1999, bfinance operates in the same space as Cambridge Associates, Towers Watson, and Mercer. Denby said the firm differentiates itself by not directly managing money and focusing purely on advisory services for institutional investors. In 2023, the firm completed a management buyout involving a 51 per cent stake formerly held by Baird Capital, a transaction supported by Beach Point Capital Management. Chief executive David Vafai now leads the firm. Under its revenue model, bfinance charges fund managers that win business a one-off fixed basis point fee pre-agreed with the client and charged against committed funds. Denby described the arrangement as another distribution channel for managers.
bfinance's core business is manager search and selection across traditional asset classes such as listed stocks and private markets including private credit and venture capital. Rather than offering a pre-set buy-list, the firm designs bespoke mandates with each client. Its proprietary investment management platform, the IMP, handles large volumes of manager tenders, and Denby said the firm can track how managers interact with client mandates in real time. A request for proposal to a final recommended solution can take as little as four weeks, while a full manager universe review typically takes 10 to 12 weeks.
Denby said Middle Eastern clients have shown renewed interest in equities over the past 12 to 18 months following the drawdowns of 2022 and 2023, and are reshaping portfolios. Private market investing in credit and equity is a major theme, and Shariah-compliant investments are an important consideration. He does not believe risk appetite in the Middle East and Africa has risen, noting a continued focus on diversification. Denby hopes bfinance will build a significant presence in the Gulf within five years and become a household name in the region.
Founded in 1999, bfinance operates in the same space as Cambridge Associates, Towers Watson, and Mercer. Denby said the firm differentiates itself by not directly managing money and focusing purely on advisory services for institutional investors. In 2023, the firm completed a management buyout involving a 51 per cent stake formerly held by Baird Capital, a transaction supported by Beach Point Capital Management. Chief executive David Vafai now leads the firm. Under its revenue model, bfinance charges fund managers that win business a one-off fixed basis point fee pre-agreed with the client and charged against committed funds. Denby described the arrangement as another distribution channel for managers.
bfinance's core business is manager search and selection across traditional asset classes such as listed stocks and private markets including private credit and venture capital. Rather than offering a pre-set buy-list, the firm designs bespoke mandates with each client. Its proprietary investment management platform, the IMP, handles large volumes of manager tenders, and Denby said the firm can track how managers interact with client mandates in real time. A request for proposal to a final recommended solution can take as little as four weeks, while a full manager universe review typically takes 10 to 12 weeks.
Denby said Middle Eastern clients have shown renewed interest in equities over the past 12 to 18 months following the drawdowns of 2022 and 2023, and are reshaping portfolios. Private market investing in credit and equity is a major theme, and Shariah-compliant investments are an important consideration. He does not believe risk appetite in the Middle East and Africa has risen, noting a continued focus on diversification. Denby hopes bfinance will build a significant presence in the Gulf within five years and become a household name in the region.
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