Alvarez & Marsal plans to double Middle East business

Professional services firm targets growth from current level of 50 staff to more than 100 within ‘three to five years’

A sale process for NMC Health's UAE and Oman assets is being run by Perella Weinberg Partners and Resonance Capital . Reuters

Professional services firm Alvarez & Marsal is planning to double the size of its Middle East business within the next five years, the company’s Middle East head Saeeda Jaffar said.

The firm, which is best known for its restructuring work, has grown from just four people when Ms Jaffar joined the company in 2016 to about “50-something” currently.

"We'll probably close the year between 60 and 70 people, depending on how quickly we can bring people in," Ms Jaffar told The National.

“And we have plans to continue the growth. And I think in the next three to five years, we should, at the very least, double again,” she added.

The US-based consultancy, which does not publicly disclose its finances, currently has more than 5,200 employees across 65 offices in 25 countries, according to its website. It was founded by partners Tony Alvarez and Bryan Marsal 38 years ago.

In the Middle East, it secured the high-profile role of administrator to NMC Health in April last year, as the biggest private healthcare company in the UAE entered into an insolvency process following the discovery of billions of dollars worth of previously undisclosed debt. An investigation into potential fraud, and the recovery of assets, is ongoing.

Meanwhile, non-core business units have been sold off and the firm has told the group's lenders that it aims to achieve either a restructuring or a sale of the core Middle East healthcare business by April. In the first six months of the administration to October 8, the firm spent more than 23,000 hours on the case and racked up more than £12.1 million ($16.5m) in fees, according to an administrators' progress report filed in November.

“I think the NMC situation was, honestly, a bit of a surprise and a bit of a shock for many ... especially because it's actually a very, very nice operating business,” Ms Jaffar said.

“That being said … I think the way it was handled and the way it's been very transparent and very open really has been quite different and quite unique compared to a lot of the other cases I've seen that are similar.”

This has not been the case at its other high-profile role in recent months. A&M was asked by Lebanon's finance ministry in September last year to undertake a forensic audit of Banque du Liban, the country's central bank, but resigned two months later because the information it needed to conduct the audit was not provided. Ms Jaffar declined to comment, and a spokeswoman referred The National to the statement the firm made when terminating its involvement.

Much of its focus in the region over the past five years has been advising on what Ms Jaffar describes as the “healthy” side of business – consultancy work on reorganisations that do not involve a formal insolvency process. A lot of this has been in financial services, but it has also targeted the healthcare market, as well as real estate and construction, “because in both of those verticals, we believed there was a lot of change that was forthcoming”, Ms Jaffar said.

“And they’ve been growing very, very well. Even before NMC, we did a lot of work in the UAE as well as in Saudi on health care, on transformations and top line, bottom line pricing, revenue cycle management, efficiencies, effectiveness – all of that in the local context very much. And now with NMC, that's absolutely further cemented our our position,” she said.

A lot of construction companies “are currently going through a very challenging time” and A&M has worked with some of the larger contractors that “are quite financially stressed” she said, without disclosing any company names.

For real estate, the work has been “less stressed and more transformational”, such as looking at potential mergers and performance improvements through restructuring personnel and improving yields from existing assets, as well as focusing more keenly on cash collection.

The firm has achieved growth in the region by clearly defining a remit and setting a deadline through which to achieve it. It will take on interim roles, but wants to make sure that by the end of the period there are people within an organisation that can pick up the mantle.

“We fundamentally believe that in order to make change sustainable, you need to grow the talent. You need to transfer the knowledge to build the capabilities and the skill sets,” she said.

The introduction of bankruptcy laws in Saudi Arabia and the UAE in recent years could also lead to more restructuring work, but this market is likely to “take time” to develop, Ms Jaffar said.

“I think, all in all, it's been a good start,” she added.