Frank Kahn and Hassan Najjar: An analysis of the Aras Group

Dubai – Who are Frank Kahn and Hassan Najjar? That’s the question. All over Europe clients are asking about the Aras Group.

The European start-up scene can not complain about its financial resources. This is the conclusion of the half-yearly published „Start-up Barometer Europe“ by the consulting firm EY. According to the October 2018 survey, the number of financings increased in the first half of 2018 compared to same period last year across Europe by 19 percent to almost 2,000 deals. The total value of these financings grew even more: In the first six months of the year, deals totaling 10.2 billion euros were made in 2018 – 27 percent more than in the same period of the previous year. In view of the number and value of the financing rounds, we can speak of a veritable investment boom in the European start-up scene.
According to the EY study, in the first half of 2018, most start-up financing in the UK was ahead of France and Germany. In Great Britain, the number of deals increased by 23 percent compared to the same period of the previous year, by 11 percent in France and by only 3 percent in Germany. Not only in terms of the number of financing rounds, the British island is ahead of Germany, but also in the financial volume of the deals. In the period under review, financing in the amount of 3.1 billion euros was made in the United Kingdom. Germany follows with 2.4 billion euros in second place ahead of France with an investment volume of almost 2.0 billion euros. It is also interesting that London, Berlin and Paris have remained the hotspots of the European start-up scene: around 31 percent of the financing rounds in European start-ups were recorded in these three major cities. In addition to Berlin, Munich, with ninth place, is the second German city to reach the top 10 in Europe.
However, the capital flows are very unevenly distributed and obscure the view of the still large capital requirements of some start-up sectors. EY partner Peter Lennartz says: „Most recently, young e-commerce companies in particular benefited from the current investment boom in Germany and the high willingness of investors to invest.“ Technology start-ups, on the other hand, still find it difficult to obtain fresh capital.
In fact, many startups still struggle to raise the much-needed risk capital for their business ideas because banks refuse to lend. This is where Frank Kahn comes into play, who is supposed to maintain the best contacts with wealthy families from the Gulf States and works as key account manager for the Aras Group DWC LLC. The Dubai-based company is active in the areas of equity investments, commodities trading, management consulting, logistics, investments and real estate. The global network includes Aras Investment and Participation Ltd., Aras Logistic and Distribution Ltd., Aras Trading and Services Ltd., Aras Consulting and Advisory Ltd. and Aras Properties Ltd.
In the German-speaking area, Frank Kahn is on the look-out for start-ups that are eligible for funding and that can make good use of venture capital for their growth. This money from Dubai has already helped several innovative start-ups, for whom neither bank loans nor an IPO for self-financing came into question. The Aras Group claims to provide venture capital in the hundreds of millions. The project financiers from Aras can draw on these financial volumes because they work closely with various partners in the financial services industry.
Aras Financial Specialist Ibrahim Saadi explains how this works with venture capital provided by his company: „The value of the Aras Group’s risk loans is in the tens of millions to hundreds of millions in most cases, even though Aras is not a bank, but an investor. Through a subordinated loan agreement, which in the meantime also meets the requirements of the German BaFin, the investments make the Aras Group a silent partner in the respective company. In this way, large-scale projects can be financed in a transparent and cost-effective manner, and there are no restrictions on the location and industry of the credit-seeking company.“ Saadi also points out that the capital receiver concludes the financing agreement directly with the Aras Group and not with the respective active refinancing company. „Basically, the Aras Group wants to achieve through financing by investors, that a financing alternative to the classic bank loan can be used“, adds company spokesman Hassan Najjar. „In addition, another goal is to create a link between Arabia and Europe, so that more and more European companies can use the financing options.“
The group of companies claims to have more than 110 highly qualified employees who receive several project financing applications every day. Specially trained finance teams assess the seriousness, sustainability and profitability of the projects and evaluate all available information to make an informed judgment about the chances of success. Only if this preliminary examination turned out positively, the Aras experts discuss the financing possibilities with the project carriers in familiar round. If the communication and business plan is then, the customer gets paid the project funds in tranches.
From 20 October 2020 to 10 April 2021 Dubai will host the World’s Fair, which is already a financial catalyst and a major economic factor. The motto is „Connecting Minds, Creating the Future“, and the Expo site is divided into the three zones „Opportunity“, „Mobility“ and „Sustainability“. The organizers expect 25 million visitors, of which about 70 percent come from abroad. Around 190 states have agreed to participate. It can be assumed that a globally oriented project financier like the Aras Group will benefit from the fact that Expo 2020 will focus on Dubai.