TAKAUD is a specialist savings & pensions business serving the national & expatriate community. Incorporated in 2011, it’s first for the region offering provides global investment expertise utilising best in class selected investment solutions developed specifically for the MENA region.
The business is well funded and owned by KIPCO, a $30bn investment company and owner of some of the biggest brand names in the region. It’s corporate saving solutions enable regional businesses to recruit, reward and retain staff by incentivising employees with additional saving and reward options. For the retail market, TAKAUD provides pension solutions which help individuals to save and plan for retirement as well as to support their children’s education, weddings and home purchases for example in later years. TAKAUD’s initial product line was launched in Bahrain during 2013 and has been well received by the market and supported by an integrated public education and marketing strategy on the need to save and plan one’s financial future. Building on this success, TAKAUD plans to enter the Kuwait market in 2014 and is currently actively engaging with the Kuwaiti media to begin educating the market about the benefits of savings and financial planning for the long term. Its success is driven by its affordability and easy accessibility.
In addition, the business is totally transparent with regards to charges, and fully regulated and licensed by the Central Bank of Bahrain. Saving contributions can begin from as little as 10 BD a month with customers supported with unequalled online financial planning capabilities via the TAKAUD online portal. Via this portal, customers can handle their entire savings or pension needs by themselves, empowering them to plan their own financial future. Moreover, its eSaver platform allows customer to fulfil the whole buying process online, in the first e-commerce platform for pensions and savings in the region. Seeking financial planning assistance from regulated and specialist savings and pensions providers who understand the region is often instrumental to a successful investment strategy. Firms such as TAKAUD can provide tailored investment strategies, which are designed to match one’s attitude to risk whether it be cautious, balanced or aggressive and one’s choice of investment category via best-in-class fund options ranging from Global, Regional or Sharia Compliant Funds. In a society where 30% of MENA’s population save nothing on a monthly basis which equates to tens of millions of people per the saving statistics coming out of the GGC, TAKAUD’s solutions are the future and provide both locals and expats and employees with an ideal platform to save and generate an extra income stream for later years to support both themselves and their families.
In an exclusive interview with BUSINESS LIFE magazine, Eric Van Biesen, the company’s renowned acting CEO and its CFO, said the company has been a pioneer in the region and will move ahead with its regional expansion plans despite the many regulatory and security challenges that may lie ahead. Eric Van Biesen has wide financial industry experience and the ability to lead and multitask at senior level in challenging environments and within several sectors. He worked as Head of Sales for Treasury and Private Banking / Wealth Management in the banking sector, and Head of Treasury / CFO / BOD member in the insurance sector. He has been a key member of the early team that has successfully built the TAKAUD Company from a mere business concept. Van Biesen’s efforts in 2012 and 2013 were more noticeable in developing the financial planning and operations of the business, thereafter becoming responsible for the strategic direction of the company and the achievement of its business plan. Prior to joining TAKAUD, Mr. Van Biesen held key regional finance positions in the insurance industry (Libano-Suisse Insurance, Amana Gulf Insurance, Globemed, t’azur Company, MEDGULF and Arabia Insurance Company) as well as key sales and marketing positions in the banking sector (ING bank and Saudi Hollandi Bank). His move to implement the new concept of Takaud in the Middle East may represent a second industrial revolution. Van Biesen has insights and solutions into the development of the savings and pension industry in the entire MENA region. No doubt, he has the determination and the ability to deliver on the vision.
BL: TAKAUD is a new savings and pensions concept. What are the qualities needed to run such a unique business in the MENA region?
Biesen: I bring in-depth international business management and financial services experience which has been gained in a range of senior executive management roles both regionally and internationally. This ensures that from a strategic level, we as a business are capable of understanding the intricacies and demands of the regional market while also applying international best practice principals from an investment perspective. This ensures that our clients receive a premium product and service. It is also important to highlight that we work as a team. TAKAUD’s senior management is made up of financial services professionals who bring in-depth expertise across our entire business lines and as a group are central to our on-going successes to date.
BL: What does TAKAUD do? What products does it offer, and is there a market demand for these services?
Biesen: To answer this question, I would like to give you a quick overview of our business. TAKAUD was founded in 2011 and provides a portfolio of ‘best in class’ savings and pension solutions for businesses as well as citizens and resident expats across MENA. Our business is a first for the region and provides clients with world class investment and savings expertise specifically tailored for the GCC and wider Middle Eastern markets. Our international investment partners include the likes of Blackrock, BNP, Dexia, Robeco, Franklin Templeton, Schroders, PIMCO and a growing list of associates. To date, we have introduced a number of corporate solutions which have included our End of Service Benefit Plan and our Employee Savings plan, which provide businesses with advice on how to manage and plan for their end of service benefits as well as to provide innovative saving solutions for their employees, which help recruit, reward and retain their staff by empowering them to save from as little as 10BD a month. We have also launched our Individual Savings Plan for the retail market, which enables citizens and residents across our region to save for their long term future from as little as 25BD a month.
Just to put our solutions into perspective. The average life expectancy in the GCC is nearly reaching 80 yrs old for example. To achieve a comfortable retirement and the ability to support one’s family in later years with expenses such as education, weddings, new home purchases and news businesses for example, proactive financial planning is needed. In terms of market demand, here are some statistics, which illustrates the need to save:
• 30% of MENA citizens save nothing at all.
• 64% of GCC citizens save less than a fifth of their monthly income.
• 84% of GCC residents believe that their savings are not adequate for their future.
(Source: National Bonds GCC Savings Index)
As a business, we are committed to creating a robust savings culture in the region, which is greatly needed. We want to ensure that ‘savings’ become a priority and that all citizens and residents are thinking about their future, later years, and retirement and to help guarantee that they and their families are secure and their aspirations fulfilled.
BL: From your description, TAKAUD sounds to be a very ambitious MENA-wide financial business. Do you have the capital support for that today?
Biesen: We are an ambitious business and are committed to providing long term savings and pensions solutions to individuals and corporations within the local and expatriate communities across the MENA region. In terms of capital support we are exceptionally well funded as we are 50% owned by Kuwait Projects Company (Holding) K.S.C. (c) (KIPCO) and 50% by United Gulf Bank a member of The KIPCO Group. The KIPCO Group is one of the biggest holding companies in the Middle East and North Africa, with consolidated assets of around US$ 30 billion as at 31 December, 2013.
BL: Every business has its own set of challenges. What challenges has TAKAUD been facing so far?
Biesen: In terms of challenges, we face the lack of a savings culture as highlighted, different regulatory landscapes across the MENA region and a capital markets ecosystem that is still developing in terms of performance, funds and investment vehicles. However, as part of our due diligence pre- launch, we are very much aware of these challenges and have planned our growth and expansion accordingly. .
BL: What about your expansion plans within the MENA region? Which countries and which timeframes?
Biesen: We entered the Bahrain Market successfully last year with the official launch of our individual and corporate savings solutions which provides an ideal ‘test-bed’ for wider market launches to refine our product and service offering. Our next launch market is Kuwait, home of our major shareholder KIPCO and which is, in many ways, demographically homogeneous to Bahrain. After our Kuwait market entry, we will assess wider MENA market opportunities and capitalize on KIPCO’s strong presence in Algeria and Egypt. However, our expansion will always follow a disciplined ‘step-by-step’ approach which will balance shareholder expectations with our ability to deliver a premium service to our corporate and retail client base.
BL: What are your business expectations for new markets from both a GCC and wider MENA perspective?
Biesen: Our business model thrives on countries with large demographics and healthy per capita income levels but if we look at the GCC alone as a key market, the IMF forecasts that GCC economic growth will be 4.4 per cent in 2014 as oil production rises and the non-oil sector benefits from the large infrastructure projects being implemented. In addition, since 2009, combined GDP of the GCC, or the total value of goods and services provided, has grown by over 68 per cent during the past four years, from $955 billion in 2009 to an estimated $1.6 trillion in 2013. These underlying dynamics will support the growth of our business in the GCC with other key economies such as Egypt also reporting a return to growth.
BL: What’s the key difference between your pension solutions and those offered by State authorities and why are your solutions needed?
Biesen: The real dilemma and worry for many people is that once they approach the end of their full time working career, it is often only then that they realise that they do not have the financial resources in place to continue their families’ lifestyle in a way that they have become accustomed to. This can also affect those who will receive income from public pension schemes. Whilst these schemes are often regarded as generous it must be remembered that final incomes are very much dependent on age, years served and final salary. This may leave many individuals and families requiring additional supplementary income. TAKAUD’s pension scheme allows the individual to save and to be in total control of their monies and investment. It can be used to complement existing state pension schemes to provide more income in retirement and make up for any ‘short falls’. It is also strategic as you are diversifying risk as opposed to having one’s entire pension in one investment vehicle, whether public or private.
BL: What is your strategy for 2014?
Biesen: In terms of our 2014 strategy it is multi-layered. We will continue to build our business in Bahrain via the roll out of our Individual and Corporate savings plans with a focus on Kuwait as our next entry market later this year. Longer term, we will be reviewing in tandem with KIPCO the opportunities that exist in the GCC and the wider MENA region (Egypt, Algeria, Tunisia and Iraq). We will build on these initiatives by continuing our active Thought Leadership programme across the GCC educating corporates and the public on savings and pensions as well as beginning to plan the regions first Private Savings and Pensions Conference. From a product perspective, we are planning the launch of TAKAUD’s eSaver solution, which is a new ‘do-it-yourself’ online savings product – unique for the whole MENA region. We will be exceptionally busy for the year ahead but with the support of KIPCO and the wider TAKAUD team we are well positioned to be the ‘go to’ firm for savings and pensions for the region.
