In preparation for Iran’s economic momentum expected after the lifting of western sanctions in 2016, many foreign companies are heading to Tehran in search of lucrative business opportunities.
One such company is Arjan Capital Ltd, an investment and advisory firm that provides investment banking services and industrial and legal solutions to global investors planning to enter Iran’s market.
Financial Tribune conducted an interview with Andreas Schweitzer, one of the co-founders of Arjan Capital Ltd., on the company’s activities in Iran.
The full text of the interview follows:
please introduce your company and its mission in Iran.
SCHWEITZER: Arjan Capital and our fund structure are both incorporated in Malta. Arjan Legal, our law firm, is incorporated in Tehran.
We have our proprietary family of funds incorporated in Malta and the investment advisory is regulated by the Financial Conduct Authority of the United Kingdom, which operates independently of the UK government and is financed by charging fees to its members who are part of the financial services industry.
We are authorized to raise money in and outside of the European Union. Hence, we can raise special funds for investment in hotels, hospitals, listed equities and private equities in Iran.
Arjan Capital provides tailor-made services to its clients. For example, obtaining good quality research in Iran is quite hard. You may find comprehensive reports for companies listed at the equity market. However, it is more difficult to gain reliable data on the non-listed ones.
Our company facilitates multinational business in Iran. We help the companies get established in Iran and then we help them raise money.
What’s your take on Iran’s debt market?
The Iranian debt market correlates in cost with the local equity market. For foreign investors, it is probably a little early to get into that business. A hard currency trade finance fund would be an attractive model.
Which Iranian sectors are your clients most interested in?
The construction sector tops the list, as there is huge demand for new hospitals and hotels in Iran. The mobile phone market, financing and leasing, aviation, automotive and energy are other interesting sectors. Also, fast-moving customer goods are on our radar.
In addition, many European Union companies are interested in taking over or acquiring part of the Iranian companies with hidden potential.
Moreover, I am quite sure that some of the Iranian companies will embark on acquiring companies abroad. We believe that mergers and acquisitions activities will pick up in the near future.
What are the legal pitfalls in Iran’s capital market?
In order for the country to flourish fast, two issues need to be addressed.
Firstly, international banks need stability in order to operate with local banks without any underlying risks or penalties. This is a precondition for international money to flow into Iran in large quantities.
Secondly, the Iranian commercial law needs to be updated to current international practices. Given the current legal pitfalls, doing a merger and acquisition deal is quite complicated.
