An Education in Partnerships & Progress

[Music] hi everyone thank you for sitting in at this session my name is Shelley Rosen I'm a partner and co-head of the investment management practice at Hanes and Boon in New York hannes and Boon is a full service commercial law firm operating globally uh my area of expertise is in Investment Management we structure and design private investment funds for liquid to illiquid strategies hedge funds private Equity private Equity Real Estate infrastructure and Venture Capital um we also specialize in very specific types of structure deals such as continuation funds co-investments funds of ones spvs and the other side of our business is specific to family offices we help structure and design family offices as well as help with their Investments and allocations into private investment vehicles and direct deals um and I've been doing this for 25 years and I'm happy to see all of your faces and if anyone would like to connect after please feel free to reach out to me I'll be wandering around the conference for the next few days and I can also be reached on LinkedIn and other forms of social media um I'd love for my two co-panelists to introduce themselves doo do you want to start yes good good morning I think we're still in in the morning good morning everybody my name is din oari I'm the group chief executive of gems education um some of you may know but uh the story of Gem's education the story of my family and frankly the story of this great country is very closely intertwined uh my grandparents were teachers they immigrated to the UAE over 65 years ago uh believing that they could make a better life for themselves uh this community and this country uh and now today 65 years later uh we are the largest K12 education company in the world in terms of students enrolled but I think much much more importantly we hope that as an organization we've been a critical part of the social infrastructure that has frankly allowed the United Arab Emirates to enjoy the position that it has today globally okay Shad so my name is Jad Delon I'm a managing partner and head of the Middle East for Brookfield asset management uh Brookfield is one of the world's largest alternative asset managers we manage over a trillion dollars of uh assets under management today 13 billion of those are in the Middle East where we've invested across real estate assets infrastructure uh as well as corporate private equity and uh the reason I'm up here today is our latest investment was alongside the vary group in uh gems education okay thanks so let's just Jump Right In in I have a million questions and we have very limited time so let's just start going down the list and um I'll let anyone who wants to answer please feel free to just jump in uh let's start with strategy and long-term growth family businesses often prioritize long-term value over short-term gains how can they balance this philosophy and with the agility that's needed to adapt to today's more Dynamic markets I can certainly start if um I think family businesses generally uh especially if they run well typically are focused on creating generational value yes but I don't necessarily think that's in conflict with again short-term gains or continuing to be agile enough to respond to what is obviously a very Dynamic macroeconomic environment um so I actually think that both of them are complimentary not necessarily in conflict so we um we view ourselves as long-term investors to begin with um we have multiple pockets of capital but something that is core to Brookfield in our DNA uh is that we believe in long-term capital um and the uh uh the reality is that also makes you a better investor just because you can live out cycles and so what we found is the way that we partner with families as well as the nature of our Capital um actually assists them in their long-term strategies and like Dino was saying that doesn't really take away from the ability to manage more shortterm short-term uh goals okay so let's talk about that what you said a little bit and elaborate can you talk a little bit about collaboration with global asset managers and the role they play and how they could help to develop growth strategies or or other types of strategies for family businesses and long-term preservation absolutely so uh look our strategy in the region has always been to partner whether it's institutions or families we partner with them in the region because we believe we bring a great degree of operational capital structure m&a knowhow uh but we also believe that our partners here in the region will have a lot to add that is more nuanced to the region um and so uh I would say first and foremost the partnership is across uh uh across the the uh across our strategies um but where it has been most helpful to families in particular is that families know their trade very well exceptionally well and they need to because they compete on a day-to-day basis in their uh in their sectors but where sometimes they could use some assistance is in taking a step back looking at the overall strategy uh but also evaluating how do we get from here to the long-term strategy in 10 years and a lot of the time it's helpful to have someone alongside of you who is as incentivized as you are because the equity has been put in to make sure you reach those goals in a way that is acreative to stakeholder value not just shareholder value over time but I would actually say Dino you and gems and the vary group have had private equity in your businesses for 15 years so you're probably better suited to answer that yeah I mean certainly I can share our perspective so you know with the Brookfield Le Consortium we're now on our fourth cycle of uh an Institutional Financial sponsor that's been a part of the business um look what do you look for in terms of this institutionalized capital I mean one they certainly add to the underlying credibility that you have when you're looking to you know fund raise financing if you potentially want to go into the debt or the capital markets that's an incredible amount of credibility that is necessarily added to the organization um but also for us and I think this is something that family businesses in our region can certainly look towards that journey of institutionalization that again makes you attractive to institutional capital is an important part of the process and because we've had now the fourth cycle of it that's been a very important part of certainly our journey and our positioning here in the region right can I add something yeah of course there's a lot of reasons to why you might want to go public as a family business um and those are probably for a different topic on a different day but the one thing that I would say about private Capital that has been exceptionally helpful to family businesses is the ability to tailor control and to make sure that you still have control over your destiny and some of the key ethos of the family that are ingrained in the business um when you are listed in a public market you have many shareholders you need to communicate with deal with on a day-to-day basis when we come into an investment such as gems with the Varys we make sure that we're speaking I literally speak to either Dino or the chairman every single day and we're talking about everything that is important across uh the business as well as to all the stakeholders and and that's sometimes lends better uh to families yeah that makes sense you have a business that a family has started and they know their business better than anyone but they are not mired down but have a a singular focus and when you bring an outside Partners it gives you much more variety and perspective absolutely can I add another thing of course the when we were looking at the investment with Dino and his family the one place that we felt we needed the vary group to be very involved in was on everything education yeah that is the core of their business and that is exactly why we have invested in this business is because what they do at its most fundamental basis is better than anyone else um and so we wanted to make sure that that stayed uh as a key focus of theirs okay you sort of answered a few of my questions so I'm going to move on to another round of questions let's talk a little bit about leveraging m&a opportunities um what strategy should family businesses adopt to identify and pursue high value m&a opportunities again I give my perspective very quickly look the nature of the assessment or the analysis that we would look to in terms of a potential m&a opportunity would frankly be the same as if we were building something organically from the ground up right um these would be the typical Financial metrics that any business would look at um so I don't think that in end of itself is the differentiator but certainly what we would want to do as we look at m&a is is it a creative Andor adding to the value of our portfolio is it a part of our portfolio where we currently have a gap is it in a geography that we're currently not represented in which we know will be additive to us as we look down the road 5 seven years so so for us it's just trying to ensure that we're able to plug the gaps within our portfolio that would frankly be important to us from an m&a piece okay you want to add anything look I I I would reiterate just one thing which is you either do it for product or geography and uh in this case we are the product and so more likely than not we look at geography but what I would say is we have a number of Investments and uh we have some investments in the payment sector for example there we're far more focused on what technology we can bring in through an acquisition because it'll be a lot quicker to integrate that than to build it ourselves the reality is schools uh gems has done an incredible business of building it ground up and we can continue to do that and so to Dino's point the bar is high most probably focused on Geography okay interesting so maybe we can talk about entering new markets a little bit and what the most critical factors for family businesses are to consider when expanding into new markets maybe even talking a little bit about Emerging Markets um again because we've got such a singular Focus you know we only do one thing yeah as a were we we educate children um what we're most focused on as we look to a new market is look partnership and I think Jad mentioned it more generally I think partnership is going to be important right can you find Partners within those local markets that that are embedded in those markets have the connectivity and the relationships that would be important to you as you look to scale your business in that particular Market um and of course you know uh the macroeconomics of it are always going to be relevant but for us I think partnership is probably the most important thing that you would look to in a new market Okay I uh I would look at it and say that one needs to be absolutely h with themselves if they're going to go on an m&a spree and a new geography opening spree and you need to really understand what is it that you can offer to that area and how you transpose that from where you currently are into that new geography and whether you need to be doing something different and I would say that if you think that everything is going to work from one country to another exactly the same even if it's just in the GCC I have a feeling that's a wrong uh uh uh disposition yeah okay so touching on what you just said how can families navigate cultural and operational integration issues and challenges that a company either m&a transactions or going into new markets I don't have a significant perspective on because again most of what this business has done incredibly successfully is to grow organically right the nature of m&a activity within our portfolio is very very limited that doesn't say that it isn't something that we would consider in the future but again for us actually J's probably got a better perspective of sort of integration and sort of cultural challenges in and around merging two entities well we're doing probably one of the biggest ones right now which is uh we acquired magnati which was the second largest payments business in the UAE and we just acquired with adq mubadala Fab thean group we acquired Network and we're putting them together uh to create the largest Middle East Africa payments business um I would say the number one way that we approached it was we actually set up a full-on transition committee uh which is only focused on integration and figuring out what version 2.0 is we were a little bit Lucky in the sense that it took one year to close so we had one year to prepare for it but we started on day one uh and so if I was to translate that into a private transaction I would say that you should be starting to think about how you're going to integrate everything into due diligence phase before you acquire uh or look to merge two businesses the the second thing where I've found that uh this has been very powerful for family businesses is sometimes as a family you might need to just take a little bit of a step back and look at it as if you were a third party and think of it that way um when you look at the cultural integration it has to be what is best for the business first and foremost I'll say 95% of the time what's best for the business is usually what's best for the family of course all right so let's talk a little bit about unlocking long-term potential what are some of the key trends shaping the future of family businesses and how can they position themselves to thrive in the next decade or longer look at the end of the day and again I'll speak to sort of all family businesses um Can can the nature of the work that you're doing be enduring so you know how do you how do you achieve truly generational succession right how can you ensure that um look we're still what I would consider a second generation business family even though my grandparents were teachers they were teachers they were not necessarily commercially minded um you have to ensure that I suppose the values and the principle in and around how you govern and run your business are independent of whether the next generation is going to be in the business right are encapsulated in the way that they are brought up um that's an important part of trying to ensure a level of succession Legacy look some of the world's largest longest standing businesses are family businesses and I think the reason is that they have to Dino's Point put in formal structures to ensure the continuity of that business um and so uh you know even when we work with the vary group on a day-to-day basis everything is evaluated on what is best for the business at the end of the day because that benefits everyone behind it um and so as you go from second to third third to fourth fourth to fifth generation having the proper Constitution around how the family interacts with the business will become more and more important uh but many many many many family businesses today are already doing that of course okay so we sort of run out of time here but I just want to have one closing Insight um if you had to distill your advice into maybe one or two key takeaways for family businesses that are looking to maximize value through collaboration and m&a what would it be okay so very quick Insight um I think there needs to be an alignment of what I would think of as Vision purpose and values with whoever your partner and or collaborator is uh that sort of that alignment is first and foremost uh and then secondly look I I'd go back to sort of a level of honesty can you can you engender a level of sort of honest transparent communic ation and collaboration with your partner I think that's certainly a foundation of success yeah so I think it's really interesting because uh uh dino and his family have had partners for 15 20 years I would actually start one step before that and I would tell families and their family businesses do not be afraid of bringing in a partner there are many many iterations of how this can work very well there are many previously uh done transactions that have worked out very well and um usually you find that there might be some inhibition to wanting new investors to come in I would say embrace it it's good for the business at the end of the day this as a legal adviser to a bunch of different family offices that's the advice that we always give as well just talk to people earlier on have conversations no one's trying to take over your business but they can be a creative and additive so take advantage of that sooner rather than later anyway I think that's all the time that we have thank you all thank you so much to Jad yeah thank you everybody thank [Applause] you hi everyone thank you for sitting in at this session my name is Shelley Rosen swag I'm a partner and co-head of the investment management practice at hannes and Boon in New York Hanes and Boon is a full Sur commercial law firm operating globally uh my area of expertise is in Investment Management we structure and design private investment funds for liquid to illiquid strategies hedge funds private Equity private Equity Real Estate infrastructure and Venture Capital um we also specialize in very specific types of structured deals such as continuation funds co-investments funds of ones spvs and the other side of our business business is specific to family offices we help structure and design family offices as well as help with their Investments and allocations into private investment vehicles and direct deals um and I've been doing this for 25 years and I'm happy to see all of your faces and if anyone would like to connect after please feel free to reach out to me I'll be wandering around the conference for the next few days and I can also be reached on LinkedIn and other forms of social media I'd love for my two co-panelists to introduce themselves doo do you want to start yes good good morning I think we're still in the morning good morning everybody my name is dinoi I'm the group chief executive of gems education um some of you may know but uh the story of gems education the story of my family and frankly the story of this great country is very closely intertwined uh my grandparents were teachers they immigrated to the UAE over 65 years ago uh believe that they could make a better life for themselves uh this community and this country uh and now today 65 years later uh we are the largest K2 education company in the world in terms of students enrolled but I think much much more importantly we hope that as an organization we've been a critical part of the social infrastructure that is frankly allowed the United Arab Emirates to enjoy the position that it has today globally okay Shad so my name is shad Delon I'm a managing partner and head of the Middle East for Brookfield Asset Management uh Brookfield is one of the world's largest alternative asset managers we manage over a trillion dollars of uh assets under management today 13 billion of those are in the Middle East where we've invested across real estate assets infrastructure uh as well as corporate private equity and uh the reason I'm up here today is our latest investment was alongside the vary group in uh gems education okay thanks so let's just jump right in I have a million questions and we have very limited time so let's just start going down the list and um I'll let anyone who wants to answer please feel free to just jump in uh let's start with strategy and long-term growth family businesses often prioritize long-term value over short-term gains how can they balance this philosophy and with the agility that's needed to adapt to today's more Dynamic markets I can certainly start if um I think family businesses generally uh especially if they run well typically are focused on creating generational value yes but I don't necessarily think that's in conflict with again short-term gains or continuing to be agile enough to respond to what is obviously a very Dynamic macroeconomic environment um so I actually think that both of them are complimentary not necessarily in Conflict so we um we view ourselves as long-term investors to begin with um we have multiple pockets of capital but something that is core to Brookfield in our DNA uh is that we believe in long-term capital um and the uh uh the reality is that also makes you a better investor just because you can live Out Cycles uh and so what we found is the way that we partner with families as well as the nature of our Capital um actually assists them in their long-term strategies and like Dino was saying uh that doesn't really take away from the ability to manage more short-term shortterm uh goals okay so let's talk about that what you said a little bit and elaborate can you talk a little bit about collaboration with global asset managers and the role they play and how they could help to develop growth strategies or or other types of strategies for family businesses and long-term preservation absolutely so uh look our strategy in the region has always been to partner whether it's institutions or families we partner with them in the region because we believe we bring a great degree of operational capital structure m&a knowhow uh but we also believe that our partners here in the region will have a lot to add that is more nuanced to the region um and so uh I would say first and foremost the partnership is across uh uh across the uh across our strategies um but where it has been most helpful to families in particular is that families know their trade very well exceptionally well and they need to because they compete on a day-to-day basis in their uh in their sectors but where sometimes they could use some assistance is taking a step back looking at the overall strategy uh but also evaluating how do we get from here to the long-term strategy in 10 years and a lot of the time it's helpful to have someone alongside of you who is as incentivized as you are because the equity has been put in to make sure you reach those goals in a way that is acreative to stakeholder value not just shareholder value over time but I would actually say do know you and gems and the VAR group have had private equity in your businesses for 15 years so you're probably better suited to answer that yeah I mean certainly I can share our perspective so you know with the Brookfield Le Consortium we're now on our fourth cycle of uh an Institutional Financial sponsor that's been a part of the business um look what do you look for in terms of this institutionalized capital I mean one they certainly add to to the underlying credibility that you have when you're looking to you know fund raise financing if you potentially want to go into the debt or the capital markets that's an incredible amount of credibility that is necessarily added to the organization um but also for us and I think this is something that family businesses in our region can certainly look towards that journey of institutionalization that again makes you attractive to institutional capital is an important part of the process and because we've had now the fourth cycle of it that's been a very important part of certainly our journey and our positioning here in the region right can I add something yeah of course there's a lot of reasons to why you might want to go public as a family business um and those are probably for a different topic on a different day but the one thing that I would say about private Capital that has been exceptionally helpful to family businesses is the ability to tailor control and to make sure that you still have control over your destiny and some of the key ethos of the family that are ingrained in the business um when you are listed in a public market you have many shareholders you need to communicate with deal with on a day-to-day basis when we come into an investment such as gems with the Varys we make sure that we're speaking I literally speak to either Dino or the chairman every single day and we're talking about everything that is important across uh the business as well as to all the stakeholders and and that sometimes lends better uh to families yeah that makes sense you have a business that a family has started and they know their business better than anyone but they are not mired down but have a a singular focus and when you bring an outside Partners it gives you much more variety and perspective absolutely can I add another of course the when we were looking at the investment with Dino and his family the one place that we felt we needed the vary group to be very involved in was on everything education yeah that is the core of their business and that is exactly why we have invested in this business is because what they do at its most fundamental basis is better than anyone else um and so we wanted to make sure that that stayed uh as a key focus of theirs okay you sort of answered a few of my questions so I'm going to move on to another round of questions let's talk a little bit about leveraging m&a opportunities um what strategy should family businesses adopt to identify and pursue high value m&a opportunities again I give my perspective very quickly look the nature of the assessment or the analysis that we would look to in terms of a potential mmaa opportunity would frankly be the same as if we were building something organically from the ground up right um these would be the typical Financial metrics that any business would look at um so I don't think that in end of itself is the differentiator but certainly what we would want to do as we look at m&a is is it a creative Andor adding to the value of our portfolio is it a part of our portfolio where we currently have a gap is it in a geography that we're currently not represented in which we know will be additive to us as we look down the road 5 seven years so for us it's just trying to ensure that we're able to plug the gaps within our portfolio that would frankly be important to us from an m&a piece okay do you want to add anything look I I I would reiterate just one thing which is you either do it for product or geography and uh in this case we are the product and so more likely than not we look at geography but what I would say is we we have a number of Investments and uh we have some investments in the payment sector for example there we're far more focused on what technology we can bring in through an acquisition because it'll be a lot quicker to integrate that than to build it ourselves the reality is schools uh gems has done an incredible business of building it ground up and we can continue to do that and so to Dino's point the bar is high most probably focused on Geography okay interesting so maybe we can talk about entering new markets a little bit and what the most critical factors for family businesses are to consider when expanding into new markets maybe even talking a little bit about Emerging Markets um again because we've got such a singular Focus you know we only do one thing yeah as it were we we educate children um what we're most focused on as we look to a new market is look partnership and I think Jad mentioned it more generally I think partnership is going to be important right can you find Partners within those local markets that are embedded in those markets have the connectivity and the relationships that would be important to you as you look to scale your business in that particular Market um and of course you know uh the macroeconomics of it are always going to be relevant but for us I think partnership is probably the most important thing that you would look to in a new market Okay I uh I would look at it and say that one needs to be absolutely honest with themselves if they're going to go on an m&a spree and a new geography opening spree and you need to really understand what is it that you can offer to that area and how you transpose that from where you currently are into that new geography and whether you need to be doing something different and I would say that if you think that everything is going to work from one country to another exactly the same even if it's just in the GCC I have a feeling that's a wrong uh disposition yeah okay so touching on what you just said how can families navigate cultural and operational integration issues and challenges that a company either m&a transactions or going into new markets I don't have a significant perspective on because again most of what this business has done incredibly successfully is to grow grow organically right the nature of m&a activity within our portfolio is very very limited that doesn't say that it isn't something that we would consider in the future but again for us actually J's probably got a better perspective of sort of integration and sort of cultural challenges in and around merging two entities well we're doing probably one of the biggest ones right now which is uh we acquired magnati which was the second largest payments business in the UAE and we just acquired with adq mubadala Fab uh thean group we acquired Network and we're putting them together uh to create the largest Middle East Africa payments business um I would say the number one way that we approached it was we actually set up a full-on transition committee uh which is only focused on integration and figuring out what version 2.0 is we were a little bit Lucky in the sense that it took one year to close so we had one year to prepare for it but we started on day one uh and so if I was to translate that into a private transaction I would say that you should be starting to think about how you're going to integrate everything in the due diligence phase before you acquire uh or look to merge two businesses the the second thing where I've found that uh this has been very powerful for family businesses is sometimes as a family you might need to just take a little bit of a step back and look at it as if you were a third party and think of it that way um when you look at the cultural integration it has to be what is best for the business first and foremost I'll say 95% of the time what's best for the business is usually what's best for the family of course all right so let's talk a little bit about unlocking long-term potential what are some of the key trends shaping the future of family businesses and how can they position themselves to thrive in the next decade or longer look at the end of the day and again I'll speak to sort of all family businesses um Can can the nature of the work that you're doing be enduring so you know how do you how do you achieve truly generational succession right how can you ensure that um look we're still what I would consider a second generation business family even though my grandparents were teachers they were teachers they were not necessarily commercially minded um you have to ensure that I suppose the values and the principle in and around how you govern and run your business are independent of whether the next generation is going to be in the business right are encapsulated in the way that they are brought up um that's an important part of trying to ensure a level of success Legacy look some of the world's largest longest standing businesses are family businesses and I think the reason is that they have to Dino's Point put in formal structures to ensure the continuity of that business um and so uh you know even when we work with the vary group on a day-to-day basis everything is evaluated on what is best for the business at the end of the day because that benefits everyone behind it um and so as you go from second to third third to fourth fourth to fifth generation having the proper Constitution around how the family interacts with the business will become more and more important uh but many many many many family businesses today are already doing that of course okay so we sort of run out of time here but I just want to have one closing Insight um if you had to distill your advice into maybe one or two key takeaways for family businesses that are looking to maximize value through collaboration and m&a what would it be okay so very quick Insight um I think there needs to be an alignment of what I would think of as Vision purpose and values with whoever your partner and or collaborator is uh that sort of that alignment is first and foremost uh and then secondly look I I'd go back to sort of a level of honesty can you can you engender a level of sort of honest transparent communication and collaboration with your partner I think that's certainly a foundation of success yeah so I think it's really interesting because uh uh dino and his family have had partners for 15 20 years I would actually start one step before that and I would tell families and their family businesses do not be afraid of bringing in a partner there are many many iterations of how this can work very well there are many previously uh done transactions that have worked out very well and um usually you find that there might be some inhibition to wanting new investors to come in I would say embrace it it's good for the business at the end of the day this as a legal advisor to a bunch of different family offices that's the advice that we always give as well just talk to people earlier on have conversations no one's trying to take over your business but they can be a creative and additive so take advantage of that sooner rather than later anyway I think that's all the time that we have thank you all thank you so much to Jad yeah thank you everybody thank you [Music]