Arab Jordan Investment Bank’s Hani Al-Qadi on Investing in Difficult Conditions

Colloquium on Business and Society

When Hani Al-Qadi is asked about investments in the Middle East, he sometimes channels the “Oracle of Omaha” for advice. Speaking on March 2 during the Colloquium on Business and Society, Al-Qadi, CEO and general manager of the Amman-based Arab Jordan Investment Bank, invoked the words of Warren Buffett when he advised students that investors need to look beyond the politics and conflicts that grab headlines.

“When someone looks in the desert ahead to see if there is an opportunity, you have to determine if it is a mirage or if it is for real,” Al-Qadi said. “Ignoring politics is a key guiding principle in successfully fulfilling these transactions, just as Warren Buffett advised back in 1994.”

Al-Qadi discussed investing in difficult conditions, particularly ones in which political turmoil, war, or other societal problems distress markets. Still, he said, the opportunities in such areas often outweigh the risks, noting that in the Middle East, there are nearly 100 million people under age 25 who want to improve their lives.

He provided his own framework for investing in difficult conditions:

  • Have conviction in the opportunity. “Sometimes investors are deterred by certain perceptions. If you keep your convictions, this will not happen,” Al-Qadi said. “Contrarians are often the most successful investors.”
  • Timing is everything. When the United States was preparing to invade Iraq in 2003, Al-Qadi was working with the Jordanian government on part of a telecommunications deal using fixed lines and internet—technology that was growing increasingly popular. While some investors might flee from fear of spillover in the region, Al-Qadi said it presented an opportunity to potentially reward those who kept faith in their investment. “A few months later, the war seemingly cooled and ended, and the investors benefited,” he said. “Bad conditions won’t remain bad forever. At some point they will turn around and improve. If you’re a speculator, don’t invest in difficult parts.”
  • Minimize debt and be liquid. When operating in challenging circumstances, the adage “Cash is king” makes the most sense, he said. Financial swings can ruin those who carry too much debt, but frequently investors forget to look to other means. “It is important that when there is a downturn that business can withstand that downturn,” he said. “You don’t want to invest in something where the first downturn is going to kill you, and liquidity can help.”
  • Remain flexible and agile. In the Middle East, when turmoil does strike, successful companies are able to shift with rapid changes in the political climate by having other options ready. For instance, Al-Qadi said, a hotel chain based in Cairo could already have offices set up in another part of the world, such as China, and be ready to change its business model very quickly. “If your traditional customers stop coming to visit the pyramids because of perceived threats, then be prepared to go,” he said.

About the Event

Join us for a talk with Hani Al-Qadi, CEO and General Manager of Arab Jordan Investment Bank on Thursday, March 2 at 11:45 a.m. Hani's talk is part of the Colloquium on Business and Society. The Colloquium on Business and Society welcomes alumni and other practitioners and experts in a variety of fields to discuss issues at the nexus of business and society.



Biography

Hani A. Al-Qadi is the CEO of Arab Jordan Investment Bank (Jordan); Managing Director of Mediterranean Tourism Investment Company (Jordan); Board Member of Jordan International Bank (UK); Board Member of Salam International Investment Company (Qatar); Member of the Coutts Bank Middle East Advisory Board (UK); Member of the Harvard Business School Middle East and North Africa Advisory Board (US). He is a former Board Member of: Visa Inc. (US); Emerging Markets Payments Company (Mauritius); World Economic Forum’s Global Agenda Council on the Future of Banking (Switzerland).
 
Mr. Al-Qadi started his career with JP Morgan in New York and Bankers Trust in New York and London. 

He holds a B.Sc. degree in Civil Engineering from London’s Imperial College of Science and Technology, and an MBA from Harvard Business School. He is married with four Children.