The saying "one man’s loss is another man’s gain" applies to the scramble going on among Europe’s financial elite as they try to pick off the potential 70,000 London City jobs post-Brexit.
If it is not carrying the analogy too far, Madrid appears to be the vulture that has arrived once the lions and hyenas have had their feed.
Spain is arguably the most Anglophile of all European nations and it took some time for the shock of Brexit to register. Unlike Paris, Frankfurt and Amsterdam, the Spaniards, who proudly wear Union Jacks plastered over shoes and clothing, could not quite believe the British had voted Leave.
The triggering of Article 50, the official EU divorce proceedings, has been a wake-up call for Madrid and it has realised the potential it has to lure companies across.
In the Quatro Torres it has a ready-made Canary Wharf replacement – plus an eager, skilled, inexpensive young workforce and excellent quality of life to attract the financial giants.
Spain must now have the confidence to understand that it could become a financial capital rivalling the big beasts of Europe.
As a lifestyle choice Madrid could not be further from the intense bustle of London. The salaries might not be astronomical, but at least workers can take things at a more relaxed pace. Instead of hurried sandwiches over the keyboard there are long lunches, little traffic congestion, heaps of culture and not much of a language barrier.
But Spain comes with a health warning. If banks, businesses and corporations are to feel confident in setting up shop then the country has to seriously consider law reforms in light of the Stepan Chernovetskyi case.
It appears that police decided that by dint of the fact he was Ukrainian and a multi-millionaire he must be crooked. They then embarked on an ill-advised raid – played out before the TV cameras – using officers armed with machine guns to arrest Mr Chernovetskyi at his family home. Worse still, the police footage released on YouTube panned over luxury cars, jewellery and cash, leading viewers to an obvious conclusion.
The police compounded their error by locking up the entrepreneur for a month without charge under their out-of-date "secret summary procedure".
Such arbitrary behaviour smacks of the Franco dictatorship days that Spain has tried hard to bury in the past.
Mr Chernovetskyi makes the point that if Spain’s laws “allow this sort of thing to happen to a citizen then its laws clearly do not provide enough protection”. This could particularly apply post-Brexit to the 300,000 British expats and those who join them.
Raise the subject of Madrid as a finance capital among those in London's Square Mile and there are a few chortles followed by frequent reference to "corruption". The latest scandal involves prosecutors being investigated for taking an unsanctioned 3 per cent cut off any corruption case they successfully get to court. For example, in Mr Chernovetskyi’s case prosecutors will receive €300,000 (Dh1,2 million) if they succeed in proving the alleged €10m money laundering.
The corruption tag is something the Spanish government urgently needs to address, especially as it needs more entrepreneurs and SMEs to create jobs.
That aside, Spain is just one among 27 countries from which Britain will separate post-Brexit and it is already leading to difficulties. Interacting, a Madrid-based company which employs actors as trainers, is already looking to just take those with Irish rather than British passports because of residency issues.
The excellent Erasmus university exchange scheme has been curtailed and British families with children born in Spain are torn over citizenship.
Spain has the biggest UK expat population in the EU and, aside from the pension and social services issues, the small British businesses of law firms, gardeners and English teachers, feel their livelihood under threat.
And it could get nasty. Recently the Spanish Europe minister told one British expat that “reciprocal measures” would be taken over workers’ rights and trade with Britain.
The recent UK general election has created further turmoil.
Regardless, Spain and the rest should tout for business because, at the very least, it will raise its profile, dent London’s hegemony and potentially make companies realise that there is a better offering elsewhere.
In the end, though, perhaps they would really rather do nothing at all.
“The Spaniards think Brexit is a dreadful mistake and that they are losing their best friend,” says Ed Cousins, a long-time Madrid resident.
“They really want the British to stand alongside them against the things that the Germans want.”
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
At a glance
Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
Sri Lanka v England
First Test, at Galle
England won by 211
Second Test, at Kandy
England won by 57 runs
Third Test, at Colombo
From Nov 23-27
MATCH INFO
Inter Milan v Juventus
Saturday, 10.45pm (UAE)
Watch the match on BeIN Sports
Killing of Qassem Suleimani
Killing of Qassem Suleimani
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
COMPANY%20PROFILE
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What is the definition of an SME?
SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.
A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
Group B: Paris Saint-Germain, Atletico Madrid, Botafogo, Seattle.
Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
Tiger%20Stripes%20
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Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
Destroyer
Director: Karyn Kusama
Cast: Nicole Kidman, Toby Kebbell, Sebastian Stan
Rating: 3/5
UAE release: January 31
Results
2.30pm: Dubai Creek Tower – Handicap (PA) Dh40,000 (Dirt) 1,200m; Winner: Marmara Xm, Gary Sanchez (jockey), Abdelkhir Adam (trainer)
3pm: Al Yasmeen – Maiden (PA) Dh40,000 (D) 1,700m; Winner: AS Hajez, Jesus Rosales, Khalifa Al Neyadi
3.30pm: Al Ferdous – Maiden (PA) Dh40,000 (D) 1,700m; Winner: Soukainah, Sebastien Martino, Jean-Claude Pecout
4pm: The Crown Prince Of Sharjah – Prestige (PA) Dh200,000 (D) 1,200m; Winner: AF Thayer, Ray Dawson, Ernst Oertel
4.30pm: Sheikh Ahmed bin Rashid Al Maktoum Cup – Handicap (TB) Dh200,000 (D) 2,000m; Winner: George Villiers, Antonio Fresu, Bhupat Seemar
5pm: Palma Spring – Handicap (PA) Dh40,000 (D) 2,000m; Winner: Es Abu Mousa, Antonio Fresu, Abubakar Daud
Countdown to Zero exhibition will show how disease can be beaten
Countdown to Zero: Defeating Disease, an international multimedia exhibition created by the American Museum of National History in collaboration with The Carter Center, will open in Abu Dhabi a month before Reaching the Last Mile.
Opening on October 15 and running until November 15, the free exhibition opens at The Galleria mall on Al Maryah Island, and has already been seen at the Jimmy Carter Presidential Library and Museum in Atlanta, the American Museum of Natural History in New York, and the London School of Hygiene and Tropical Medicine.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
