Interest in european football is nothing new for the Gulf’s money men .
In recent years, the high-profile acquisitions of elite clubs such as Manchester City and Paris St-Germain have added to lucrative sponsorship deals signed with Barcelona, AC Milan, Real Madrid and Arsenal,  giving leagues in England, Spain, Italy, France and beyond a distinctly Middle Eastern flavour.
But while groups such as Abu Dhabi United Group Investment and Development Limited, Qatar Investment Authority, Emirates, Etihad and Qatar Airways have targeted some of the continent’s heavyweights, Dubai-based GFH Capital have done things a little differently.
The private equity investment, advisory and fund management company made headlines in November 2012  when it finalised a £52m ($80.4m) deal to take over English second-tier club Leeds United, gaining a 100 percent shareholding.
Despite the rich history of the club, its ranking over recent years has been well below that of the Barcelonas and Real Madrids of the world, with financial woes and a lack of form sending Leeds from the Premier League to League One (the third tier) in just three years before its promotion to the Championship in 2010.
It’s a far cry from the club’s flirtation with the UEFA Champions League in the early years of the 20th century, and its last major success — winning the old First Division title in the 1991-1992 season, the year before the Premiership era.
And there are now generations of United fans who weren’t born during the golden age in the 1960s and 1970s, which brought both domestic and European success.
But rather than putting GFH Capital off acquiring the club, its recent downfall made it all the more attractive as an investment proposition.
“The term ‘sleeping giant’ is often bandied around, but I think in this case it really is true,” says David Haigh,  deputy CEO of GFH Capital, managing director of Leeds United, and — perhaps most importantly — a life-long Leeds fan.
He continues: “People ask ‘why Leeds?’ And the short answer is because it’s Leeds United, full stop.
“Leeds is very special. It’s got a phenomenal history and we want to bring back those glory days. It’s got global reach on a par with top Premier League clubs, and it’s a fantastic investment opportunity in a sector which could gain the interest of new investors, as well as being good fun.
“It’s always nice to have an investment that everyone’s interested in — and it’s one where we feel we can advance and have an impact on the business and community surrounding it.”
Formerly known as Injazat Capital, Islamic private equity investor GFH Capital is a 100 percent subsidiary of Gulf Finance House, based in Bahrain, and is better known for its acquisitions in sectors that include real estate, telecoms and healthcare.
Its current portfolio includes Specialised Technical Services (STS), Solidarity Group Holding, and First Energy Bank among others, with Jordanian production house Rubicon perhaps the best known of its exited portfolio.
While variety has always been a key element to the company, according to Haigh, acquiring a football club seems to have truly broken the mould.
He says: “We’re a large group and we’re always looking at different types of investments for us because we not only want to put our own money into acquisitions, but also that of our investors from across the MENA region, and that means you have to be diverse.
“We’ve looked at things before Leeds, looked at things after, and we are always keen to look at areas we’ve not looked at before. Traditionally we’ve looked at things like real estate, banking, financial services, tech, media, telecoms and healthcare. Those were our specialisms, but we wanted to look into other areas.
“Sport is one area where there haven’t been many Islamic investments — certainly not to the degree of a full takeover by an Islamic investment firm — but we saw a huge opportunity there.
“As an Islamic investor there are challenges — obvious ones — attached to acquiring a football club, but we believed we could overcome them, and we have. Going forward it doesn’t impact the way we run the club, and it actually means we bring some important values to the club.”
Bringing values and money to a club might be one thing, but having the experience necessary to run it is quite another, especially when you have legions of fans to answer to. Just ask fans of Glasgow Rangers, Portsmouth, or Blackburn Rovers if they feel their clubs are being looked after properly.
So why do qualified solicitor Haigh and company feel they have what it takes to make a success of the Leeds United acquisition? He claims a gradual introduction to the inner workings and culture of the club has given them a head start.
“I’ve been involved with Leeds since May last year, in one way or another,” he explains. “We started the acquisition talks with Ken [Bates, former chairman of Leeds United], and I was the first person to meet him. That was more than a year ago. Since then we signed the documents in November and I become director, and I’ve been around the club very regularly since then. So for me, I’ve had a very good period of working with some fantastically experienced people in the club.
“We have a great team here, from senior management all the way down, so it’s not that I’ve just been catapulted in and hey presto I’m the MD. There’s been a lot going on behind the scenes that nobody sees. It is obviously different to what I trained to do, and there are intricacies to being a managing director here, but that’s the case for any MD role.
“I run GFH Capital in Dubai, with a great team of people, so it’s not the first CEO or MD job I’ve had. I’m here on a daily basis now, but this is still one of our group of investments, and we care deeply about doing the best with our investments, no matter what they are.”
As an investment, GFH Capital will be looking to make a good profit in the coming years, and financial statements show that more than half of the 100 percent holding have already been sold, with a ten percent stake going to Bahrain-based International Investment Bank, and the rest going to an unnamed buyer at a profit of $776,000.
But football club ownership can be a bit murky when it comes to the cold, hard numbers.
There are some who have argued that acquiring a football club is a one-way ticket to debt. Leading Kuwaiti businessman Bader Nasser Al Kharafi said the business model “does not make sense” for private firms as they do not offer enough return on investment, while UEFA were forced to rein in excessive spending in 2010 after it was revealed half of all European teams were running at a loss, with more than 20 percent described as recording “huge” deficits during the year previous.
In the 2011-2012 season, Manchester City’s wage bill alone was £202m ($316.37m), with a loss before tax for the club of £99m, and net debt of £58m. Amazingly, the loss before tax the year before that was £197m.
Leeds United’s own financial woes have been well documented, with its debt being estimated at more than £100m at one point before entering administration and plummeting down the leagues.
So is the investment doomed to fail for GFH Capital? Not according to Haigh.
“Ultimately, we’re a bank and we’re here to make money for investors. Why would we invest in something that’s going to make a loss? Of course we wouldn’t. This is primarily an investment, and investments need to show a profit. Why else would we put money into it?
“In terms of whether you can make football clubs turn a profit, of course you can. When looking at the finances of different clubs, and assessing why people buy the clubs, how they run them, and what type of clubs they buy, you can understand why people either make a loss or a profit.”
He adds that one of the appeals of Leeds is that it represented great value for money, offering more promise than most clubs outside the English Premier League.
“We were of the opinion, as were many others who were trying to buy Leeds, that is was one of those fantastic opportunities where you’ve got a club that’s undervalued and only needed a few small changes to make a big difference.
“We’ve restructured the management, paid the most cash amount for a player in the last seven years [Luke Murphy, signed from Crewe Alexandra for a fee thought to be in excess of £1m], improved the academy, and put money into the club.
“Leeds is one of very few clubs in the Championship that has a real possibility of becoming a self-sustaining investment, and we really want to get the club into that position. We are stewards of the club for the next generation and we want to honour that.”
As well as financial responsibilities, Haigh is also aware of his responsibilities to the club’s supporters, Leeds as a city, and the future of GFH Capital as a company.
On the latter point, he admits: “Has it had a good business impact on us? Yes it has. Do we get significant people looking for investments coming to us from outside MENA now? Yes we do. Interest has increased in MENASA and Europe — people know us more now. As a company we have growth plans, and this is one investment which really helps us with those.
“The club has phenomenal potential, not just from the business side, but the community side too. One of the things we did on day one was set up a plan of reintegrating the community. People in Leeds felt like the club wasn’t theirs any more, so we started a campaign of giving the club back to them.
“We did little things like ensuring social media was up and running. When we took over the club they didn’t even have things like Twitter and Facebook accounts. It was an old way of doing business.
“The club wasn’t as much a part of the community as you’d expect a one-club city to be. Every kid in town should be wearing a Leeds shirt, but in the city centre I counted more shirts of other clubs than Leeds shirts. There’s a lost generation of Leeds United fans, so we had to change that.
“Business-wise, if there are more bums on seats, then there’s more money for the club, so you can buy better players and increase your chances of getting back to the Premier League. It all ties in to benefit the club, the community, and the business.
Haigh admits there is a lot of work to do with Leeds, but he will be encouraged by the unbeaten start to the 2013-2014 season, recording a win and two draws at the time of writing.
And away from football, he appears to carry his commitment to community through various other projects.
As a business mentor for Seed Start-up — a Dubai-based start-up accelerator and seed stage venture capital fund — he helps entrepreneurs and small business owners with advice, contacts and networking.
“In Dubai there’s a huge potential for start-up businesses, especially compared to other places in the Middle East,” he says. “There’s a good business environment, it’s a hub, it’s a stable country, and people here understand business. I think everybody who can should help develop this region.”
Equally community-minded is his work in politics. Having set up Conservatives Abroad Dubai and serving as vice chairman of Gulf Tories, his affiliation is clear, but regardless of which party is in power in the UK, he says his intention is mainly to keep expat Brits in touch with home affairs.
“What I saw when I came out to Dubai was a huge number of British people and huge potential in terms of bridging the gap between the UK and UAE, both in terms of trade and community.
“A lot of what I have done is to make sure Brits know they can register to vote back home in elections — it keeps a good connection. Business-wise I try to bring politicians out to the UAE to expose them to the business community, and keep things active there.”
On this evidence it seems Haigh is true to his word when it comes to communities — something from which Leeds United fans will surely draw encouragement.
Only time will tell whether he can help restore United to its former glories, but it sounds as though he’s going to have fun trying.