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Family offices, large family businesses exhibited great resilience in Mideast

Dr Adil Alzarooni, chief executive officer, Al Zarooni Emirates Investments.

Dr Alzarooni is focusing on the launch of Citizens School, a visionary K-12 school located next to City Walk in Dubai, which will open its doors this September.

Published: Sat 30 Apr 2022, 11:10 PM

Updated: Fri 17 Jun 2022, 4:19 PM

By
Sandhya D'Mello

The Covid-19 years have been incredibly challenging for everyone but family offices and large family businesses in the Middle East have exhibited great resilience despite the pandemic’s negative impact on sales and investments in most industries, said Dr Adil Alzarooni, chief executive officer, Al Zarooni Emirates Investments.

“2020 and 2021 have served as an opportunity for all firms, including family firms, to self-reflect and do a thorough analysis in order to identify what’s working and what isn’t. As a result, many family businesses have realised that they need to transform the way they work. This transformation may entail a move towards digitalisation, designing a more formal family business governance structure, diversifying into other sectors and sources of revenue, and/or taking a new approach to people management,” said Dr Alzarooni.

“Family businesses generally evolve over generations but in these critical times they are preparing to adapt to survive any rapid external changes and navigate bleak moments. But despite unprecedented changes and disruptions, family businesses in the Middle East are still optimistic, as reflected by the results of recent surveys.”

According to one study by PriceWaterhouseCoopers (PwC), 89 per cent of family businesses in the region expect revenue growth in 2022 while 58 per cent plan to expand into new markets over the next two years. Al Zarooni Emirates Investments (ZEI) is a UAE holding company, incorporated in Dubai in 2009, which manages a strand of the Al Zarooni family’s assets in private equity, public equity, investment funds and real estate.

“We plan to continue growing the family wealth via intelligent, focused and strategic investments as well as through the effective management of our existing businesses in the sectors of financial services, logistics, media, technology, healthcare and education,” he added.

Diversification

Apart from ZEI, in 2022, Dr Alzarooni is focusing on the launch of Citizens School, a visionary K-12 school located next to City Walk in Dubai, which will open its doors this September and has started taking admissions. He has also established a new venture CapiZona which brings together a group of highly experienced professionals and experts to provide specialised services related to family business sustainability, venture studios for family businesses and economic zone development. Dr Alzarooni is an Emirati business leader with over 20 years’ experience in executive management, investments, sales, logistics, IT security and economic zone development. He has served in various leadership positions within UAE government entities as well as family-owned businesses. He has bolstered his portfolio with directorship positions in several firms in diverse sectors. He also operates two family offices and is a passionate educator and an inspiring public speaker in the fields of economic zone development and the sustainability of family businesses.

Dr Alzarooni holds an undergraduate degree in engineering from the Etisalat College of Engineering, an MBA from the American University of Sharjah, and a PhD in Family Businesses and Business Systems from the British University in Dubai and He is also the co-author of Economic Zones: The Essentials, published in June 2021.

According to Dr Alzarooni, in order to remain more competitive, family businesses need to focus on education and professional development. Educate family members and train non-family executives so that they have the necessary skills and competencies required to manage wealth.

“With a sound educational foundation, family offices can find their purpose, build their vision, design formal governance structures, implement best practices, improve connectivity and strengthen communication, etc. They can find ways to reorganise their operations in order to improve efficiency and reduce running costs,” he said.

Dr Alzarooni advises to get a predictable return on investments, especially during volatile market conditions, they need to focus on non-traditional asset classes, such as real estate and private equity. To scale up, single family offices can merge with other family offices or open their doors to other clients, becoming multi-family offices that provide ultra-high-net-worth families with a trusted group of highly skilled professionals who can preserve and grow their wealth. With families and their investments becoming more decentralised and complex, some family offices can also consider going international and setting up their offices in different financial hubs and emerging wealth centres of the world.

Sustaining Family Businesses

Dr Alzarooni has authored his second book Sustaining Family Businesses: The Essentials and is based on the research he conducted while pursuing a PhD in Family Businesses and Business Systems from the British University in Dubai. The book also draws on more than a decade of his professional experience at Al Zarooni Emirates Investments, where he helped structure my family’s businesses and investments. It’s also inspired by various insightful conversations he had with family business leaders from the UAE and other countries.

“By writing this book, I wanted to address certain misconceptions about family firms, start a discussion on their common struggles and superpowers, share enjoyable insights on modern family business concerns and offer a simple step-by-step guide on sustaining and transferring wealth across generations,” he concluded.

— sandhya@khaleejtimes.com