In first, global financial institution takes equity stake in Iranian financial services firm

Bourse and Bazaar | Esfandyar Batmanghelidj : Mofid Securities, Iran’s largest independent brokerage and financial advisory company, has entered into a major new agreement with Azimut Group, one of Europe’s leading asset managers. The agreement will see Azimut take a 20% stake in Mofid Entekhab, the asset management business of Mofid Securities, as Azimut and Mofid seek to bring a higher standard of asset management offerings to the Iranian market for both domestic and foreign investors.

The new deal makes Azmiut the first global financial institution to make an equity investment in an Iranian financial services company. It comes at a time when Iran’s financial services sector has made recent headway in reconnecting with global counterparts. New financing deals with Austria’s Oberbank and Denmark’s Danske Bank and an announced commitment from French bank BPI suggest that more foreign capital is set to flow to Iran in 2018, so long as the possible snapback of secondary sanctions does not take place. Similarly, investor appetite has grown with investment companies deploying foreign capital in Iran’s public and private equities in historic volumes.

With the minority acquisition and joint pro rata capital increase, Azimut will help Mofid Entekhab to develop new investment strategies in local asset classes. Marketing will see a boost with an expanded, locally trained sales force. Most importantly, Azimut and Mofid intend to launch new offshore funds to enable foreign investors to gain exposure to promising Iranian equities.

Mofid Entekhab currently manages USD 89 million in six mutual funds and managed accounts, with 8% market share among Iran’s equity funds. The Mofid Group, founded in 1994, has earned a reputation for its innovation in the Iranian financial sector. The company has invested considerably to raise the standards of its services to international standards. Notably, Mofid owns Pouya Finance, the fintech company behind BourseView, the most extensive financial data platform for Iran’s capital markets.

The new partnership with Azimut is consistent with Mofid’s effort to provide clients to “a new suite of financial advisory and wealth management services in line with the highest international standards,” said Hamid Azaraksh, Chairman of Mofid Securities. Azaraksh states that the company’s strategic goal is “to capitalize on [its] track record as the leading financial intermediary in Iran and create with Azimut a benchmark for the local asset management industry.”

For Azmut, the deal represents a bold move into a country with immense financial potential. Sergio Albarelli, CEO of Azimut Holding, described the deal as “a historical first step for a global player entering the Iranian financial market.” Albarelli noted the compatibility of Mofid and Azimut, based on “core values of independence and commitment to performance.”

The deal, announced just a week before U.S. President Donald Trump is set to declare whether he intends to “de-certify” Iran’s compliance with the JCPOA, offers another example of the strong European commitment to economic engagement with Iran, which is now in evidence across sectors.

Photo Credit: Mofid Securities