It is not often you meet people who have started from extremely humble beginnings to reach dizzying heights. And yet as we walked into Bal Krishen’s elegant office, what was immediately clear was that the CEO and chairman of UAE-based financial services and investment firm Century Financial remains firmly grounded, despite his lofty achievements.
Greeting us personally, Krishen was exceptionally hospitable and warm, and quick to start a friendly – and erudite – conversation. “I have always believed that ‘It is not about what life has offered you, but what have you done with that offering’,” he explains.
Krishen exemplifies that narrative. Born in India as one of nine siblings in a modest family, he completed his basic education in a local school where his father was a teacher. “But I was more interested in acquiring practical knowledge. I started working at an early age by doing several odd jobs, which helped support my family and provided early learning experiences. My entrepreneurial instincts were shaped when I took a risk and started a small business venture in my native town. It paid off and encouraged me to explore better opportunities outside my hometown. When my father retired early, I decided to go to Dubai aspiring to find a good job that would provide a better livelihood for my family back home,” he says.
Arriving in the UAE in 1996, Krishen was determined not go back empty-handed and took the first job he could find – at a local hotel in Dubai. “I learned the fundamentals of people management and the importance of customer service. I started as a bell boy and quickly worked my way up into an admin job at the hotel,” he elaborates.
The magic happened when a client at the hotel, a senior banker, noticed Krishen’s exceptional mathematical skills. “The banker noticed my speed and consistency with numbers and encouraged me to consider a career in investments and finance. This interaction made me seriously consider a career in the financial investment industry.”
In 1999, he met Emirati entrepreneur and the then chairman of Century Financial, Sulaiman Baqer Mohebi, who agreed to give the tenacious young man an opportunity in his company as an office assistant. “During my initial days in Century, I closely observed the work done by the customer service and sales teams. I soon got an opportunity to work as a junior dealer, where I assisted in the supervision of transactions across major global exchanges. I worked 12 to 15 hours every day because I wanted to learn more and better understand the business. I believe it was my passion and persistence that led me to further growth within Century. It started with the position of trader and financial analyst, and eventually, I went on to become head of Investment trading. From there started the leadership roles with associate director, director, and ultimately, the CEO and chairman of the company.”
His dramatic rise in the last 20 years at the company is a well-known journey, and yet is an inspirational one which reflects the attitude with which Century has – and continues to – evolve. “My greatest life lessons have not come from any achievements I have attained, but rather from the process of attaining that success.”
Krishen’s two-decade journey to the top has echoed the rise of the UAE’s growth as a regional economic hub – particularly in the financial and investment industry. The country’s GDP has grown in the last 10 years, while it has also seen a steady increase in foreign direct investment (FDI) inflows. In fact, FDI inflows grew 44.2 per cent year-on-year in 2020 to reach Dhs73bn ($19.88bn) despite the Covid-19 crisis, a report by the Ministry of Economy last month stated. The cumulative value of foreign direct investments inflows (including equity inflows, reinvested earnings and other capital) amounted to $174bn, a year-on-year growth of 12.9 per cent.
“Despite the UN’s estimates that global foreign direct investment flows decreased by 42 per cent in 2020 over Covid-19, the UAE witnessed 44 per cent growth in FDI flows in 2020, compared to 2019, to reach Dhs73bn. Good crisis management is a guaranteed investment,” the UAE’s Vice President and Prime Minister and Ruler of Dubai Sheikh Mohammed bin Rashid Al Maktoum said on Twitter.
A major factor in the evolution of the UAE’s investment market has been its diversification into new and innovative avenues. “The growth of the UAE’s investment landscape has been synonymous with the global growth seen in new types of investment products. Currently, the market not only provides options to invest in stocks and bonds, but also other upcoming niche concepts like fractional real estate investment and fintech-based products. Individual investors in this region are now warming up to new products in this space. They now see not just the immediate returns from the products, but also want to be a part of its growth journey. With financial market investments, patience has always paid out over the longer term,” stresses Krishen.
While the pandemic had an adverse impact on many industries, investors capitalised on the bearish markets to find new opportunities. Predictably, investments were skewed to sectors where faster growth was anticipated.
Post the outbreak of the pandemic, the regional investment sector has seen lower-sized offerings with options tailored for conservative wealth preservation purposes. One of the positive factors that has strongly countered the ill-effects of the pandemic is the UAE’s new investment law, which aims to give 100 per cent foreign ownership in some onshore business sectors. The new changes relating to foreign investment rules are also expected to further boost FDI/FII contribution to the economy.
Where to invest?
While the pandemic has created many first-time investors in the region, it has also – understandably – introduced a strong element of caution in the way people invest their wealth. While portfolio diversification is key, certain asset classes are performing better than others in the current climate.
The equities and commodities space seems to be witnessing a bullish trend. With respect to equity markets, the amount of fiscal and monetary policy stimulus support available is of gargantuan proportions. The US monetary stimulus fiscal response in 2020 was among the largest in the world, and it was similar with European economies where the ECB council has passed over 1 trillion euros worth of emergency pandemic measures. Taken together, these measures have created a risk-on sentiment across the global markets,” says Krishen.
Regionally as well, there is a pick-up in industrial stocks, with Abu Dhabi Securities Market General Index (ADSMI) Industrials and Dubai Financial Market (DFM) Industrials up by 17 per cent and 5 per cent respectively on a year-to-date basis. In its annual report published in February, Dubai bank Emirates NBD said it was bullish on banking, telecom and logistics stocks in the UAE this year, driven by strong dividend yields and growth prospects.
Meanwhile, the rise in the commodities space is being further supported by a pick-up in the recovery cycle theme and rotation back to cyclical and value stocks, opines Krishen.
“Certain other factors, including low H1 2020 inflation base effect and seasonal patterns are also favouring the current rise in commodities.” Gold prices have risen in recent weeks, with bullion now erasing its 2021 losses. “This is well supported by the ongoing drop in dollar prices,” he adds.
Importantly, investors are seeking to diversify more beyond the traditional banking products and explore niche products, while also looking at aspects such as sustainability.
“One of the major investment themes that is set to grow further is portfolio diversification, and financial institutions are coming up with new products to meet the contemporary requirements,” explains Krishen. “The entire emphasis has shifted to sound and proper investments with a focus on value and long-term growth. The advent of new and upcoming fintech technologies like blockchain has also caught investors’ eyes.”
In line with the demand for innovative products, Century Financial is planning to venture into real estate tokenisation/crowd-funding in the UAE – a booming segment within the proptech space.
Globally, the real estate sector is witnessing an increasing demand from new investors for greater access and from existing investors for improved liquidity, requiring a transformation of the investment landscape, consultancy KPMG said in a research paper last year. “Tokenisation is a rapidly developing area in the financial industry which enables investment in the form of digital tokens backed by real world securities or assets. Tokenisation facilitates digital fractional ownership with secure transaction records and swift settlement processes,” the report stated.
The key advantage that it will bring to the market is opening up investment opportunities for a new type of investor. “Fractionalising ownership shares to offer lower minimum investments and undertaking the fund-raising process in a digital marketplace has the potential to increase access to real estate investment by small and retail investors. The UAE, and especially Dubai, has an array of properties with promising appreciation and great rentals. The aspirations to invest in such types of real estate properties usually belonged to a bastion of big investors, [but through fractional ownership] will now interest small investors,” states Krishen.
“We believe that investment trends will move in the direction of maximising the profits while reducing the risk as much as possible, whether in the digital assets sphere – which is expected to continue its impressive growth, or in the derivatives market – which is expected to present a multitude of profit opportunities due to strong trading in a post-Covid world,” he adds.
Expansion mode: On
Analogous to his personal journey, Krishen is keen to relentlessly drive Century Financial to the next level. It recently set up two new divisions, Century Private Wealth and Century Bank Brokers.
“Century Private Wealth is a bespoke wealth and asset management company operating under the Category 3C licence regulated by the Dubai Financial Services Authority, focusing on two primary business activities, asset management and wealth management. The asset management arm is currently in the final stages of launching our first hedge fund, aimed at serving professional clients with a unique investment strategy,” says Krishen.
“The private banking and wealth management wing of Century Private Wealth is more bespoke, allowing valued clients to opt for select services that are advisory, discretionary or execution-only. Century Private Wealth hopes to make a mark by offering unbiased and independent advice to clients based on their risk profile and investment preferences.”
Meanwhile Century Bank Brokers includes a core team of banking veterans who offer a curated portfolio of retail and commercial banking solutions through partnership with banks, non-banking finance companies and other financial institutions.
The company has also diversified operations with the launch of its Innovation Lab, which will provide and implement end-to-end investment solutions to clients by using artificial intelligence (AI), machine learning (ML) and other technology tools. “New initiatives covering e-commerce and delivery apps as well as apps for sports and entertainment are also being considered in the near future,” reveals Krishen.
Geographically, the company is also looking to diversify the company’s interests into Saudi Arabia and other GCC markets.
“Century is on an expansion mode and currently we are exploring the potential opportunities and meticulously studying new business segments as well as synergies with our existing business. This will not only provide an additional revenue stream to the company, but also compliment the existing business. Verticals such as real estate crowdfunding, attractive sharia-based financial products, venturing into cryptocurrencies or entering into a niche asset class are areas of interest for us now.
“My vision for Century is to create a world-class organisation that is a congregation of customer-focused but technologically-driven companies in the financial and investment category. We are always open to exploring new areas of growth that go beyond the financial sector but promise to fill a potential ‘customer need’ gap.” He adds: “We genuinely think that if you can get two factors right – having a clear direction on what you are endeavouring to do and bringing in great people who can execute these ideas – you can build a world-class organisation.”
On a personal level, Krishen says his vision is to work towards the upliftment and development of the underprivileged sections of society, focusing on 3Es – education, employment and empowerment.
His mantra for those aspiring to be on a similar odyssey? “I believe that you just need the right attitude and the ability to take calculated risks to realise your dreams.”