Investment Principles
- Proper balance between Risk and Return: NBC seeks an optimal balance between risk and targeted returns.
- Focus on Long Term Investment: NBC invests with a long-term vision, looking beyond market cycles and short-term volatility to focus on long term trends that will drive sustainable returns for the investment pool over the long term.
- Sustainability of Earnings: Generating a stable stream of recurring returns is a key priority at NBC.
- Flexibility: NBC aims to provide ultimate flexibility for bondholders and investors through a wide range of investment offerings with different time horizons and liquidity needs. In addition, with its investment expertise, NBC has the ability to structure bespoke investment solutions tailored to investors’ requirements.
Governance, IPS and Investment Committee
Regulatory Compliance and Regulation: NBC investment decisions follow a rigid investment process governed by the highest standards of corporate governance with strict oversight by the regulatory authorities governing the Company and the investment pool.
The responsibilities of NBC’s Board, committees and departments are defined within clear governance and regulatory rules.
The Board delegates its authority with respect to investments to the Investment Committee that consists of four members, two of which being Board members, in addition to the Chief Executive Officer and one other independent member appointed by the Board.
In addition to internal organizational rules, the investment portfolio is audited and regulated by various external bodies including UAE’s ESCA, the Internal Audit Office of the Government of Dubai, and the Shari’a Supervisory Board. It is also audited by reputable External Auditors.
Shari’a Compliance: All the investment transactions and operational activities of the pool are regulated and reviewed by an independent and dedicated Shari’a Board chaired by leading Shari’a scholars in the region.
Asset Allocation Strategies
NBC has a diversified portfolio spanning various asset classes in the major financial markets, which enables the Investment Team to achieve balance between risks and returns, across market cycles, to the extent possible.
Given the strict risk policy adopted by the Company, which protects it, where possible, in the event of any negative consequences, the allocation to "Cash Investments" and "Income Instruments" is the highest of the total allocation of investment assets in the Mudarabah pool.
The Company has a diversified sectoral portfolio across shari’a-compliant sectors.
Cash and Liquidity Investments
- This allocation of the investment pool’s assets ensures the effective management of liquidity to meet the various financial obligations and make the most of investment opportunities when available.
Fixed Income Investments
- Depending on the existing business model, fixed income investments are considered a major part of the Mudarabah pool’s investment portfolio.
- The Team’s active and dynamic approach to investments in fixed income markets helps decrease the overall portfolio risk while achieving promising and stable returns.
Public Equity Investments
- NBC manages a highly diversified portfolio of equities which focus on quality, value and earnings growth potential.
Real Estate Investments
- Real estate investment enhances the diversification of the pool's investment portfolio while maintaining a consistent stream of returns across various market cycles.
- NBC’s portfolio includes residential, commercial and other real estate assets in the office sector, in addition to investing in various real estate funds, locally and globally.
- NBC collaborates with a network of global partners to reach innovative and sustainable solutions.
Alternatives
- The Investment Team attaches particular importance to exploring concepts beyond conventional asset classes, with a view to capture diversified, risk-adjusted returns.
