Kuwaiti businessman Mohammad Al Duaij is the CEO of Alea Global Group. The single-family office invests the wealth that his family accumulated over several decades through real estate development and general trading activities in the Middle East into companies and projects that span sectors and geographies.
In 2019, Al Duaij launched the Africa Family Office Investment Summit, an annual event designed for family offices on the continent and those who want to connect with them. He recently had a brief conversation with Billionaires.Africa about the under-representation of family offices in the region, how family businesses on the continent can sustain legacy and the ambitions of the Africa Family Office Investment Summit.
With that introduction, we hope that you enjoy our blitz tet-a-tet with the Kuwaiti entrepreneur.
– You are a scion of one of Kuwait’s most prominent business dynasties. Can you walk us through a bit of your family’s history?
– The Al Duaij family is originally from Saudi Arabia and moved to Kuwait in the 17th century. They built one of the main avenues of the old Souq in the country, called Souq Bin Duaij, which still carries our name. They also established the first water foundation in Kuwait, Sabeel Al Duaij, to distribute fresh and clean water to the public for free. The source of my family’s wealth was initially real estate and trading.
– You run your own family office, Alea Global Group. Over the course of your time running Alea Global, what has changed in the family office investing universe and where do you believe trends could evolve from here?
– Alea invested primarily in real estate in Kuwait and Saudi Arabia with a private equity portfolio in Europe before I joined as the group CEO in 2008. We then expanded into Latin America where we purchased agricultural land in Brazil, as well as into the physical commodities business, which we manage out of Asia.
COVID-19 brought the attention of many wealthy families to the need to invest locally and into projects that carry a significant social impact. At Alea, we started to invest locally first in agriculture, in order to meet the current demand, as well as in renewable energy, which we believe is the future. However, we continue to look for opportunities abroad. Frontier markets are on the investment radar for many family offices.
– Africa has the least representation in terms of the number of family offices in the region compared to Euro, Asia and the Middle East. In your opinion, what do you think are major hurdles stalling the rise of family offices in Africa?
– We started to see family office terminology arise in the Middle East only over the past 10 years. I think that Africa already has the concept of family offices, but not the terminology. As African governments start pushing to develop their business environment, we will start to notice African family offices getting stronger.
– What are the real struggles non-African family offices based in the continent go through while doing business in the region? Are there common challenges these family offices face or do the challenges vary from country to country within the region?
– The challenges vary from country to country depending on how the economy is developing and the level of transparency there. In some African countries, there is a lack of transparency and the international business foundation still lags far behind when compared to other regions. This makes some family offices around the world a bit hesitant to jump in. There is also the difficulty of doing due diligence and managing the business from abroad. These are two other factors that make it harder to do business in some African countries.
– Are economic policies in the region more favorable to indigenous family offices compared to foreign family offices based in Africa?
– Economic policies are one of the major factors that family offices consider when making an investment decision. This is why Africa is experiencing less foreign capital inflow compared to other regions.
– Most family offices are renowned for longevity, with businesses that thrive from one generation to another. What exactly informs the succession plan of most of these long-standing family offices?
– Generations need to feel responsible toward their family legacy and appreciate the brand name.
– In the event where prospective successors decide to deviate from the family’s line of businesses or show a lack of interest, what can be done to sustain its business legacy?
– First, you need to build the passion to work for the family business or family office in the successors at an early stage in their lives, so they will feel a responsibility toward the family legacy. However, if a family member is not interested in getting involved, I believe that compromise is the best approach. This could mean integrating new businesses that better match the interests of that specific member of the family.
– What inspired you to convene the Africa Family Office Investment Summit and what do you hope to achieve with it both in the short, medium and long term?
– Africa is always on our radar, as we have strong ties with a number of African families. Our plan is to cover every continent. The chief objective of the Africa Family Office Investment Summit is to create opportunities for like-minded professionals, and to solve problems together. In the long term, we hope to build a platform where African family offices can exchange expertise, share knowledge and invest together.
– What are the two most important things for African governments to put in place to encourage foreign direct investments from other family offices outside Africa?
– Market transparency. And African governments also need to facilitate the flow of funds and improve legislation.