You might think a spell in the armed forces would be a bit of a career dampener for an ambitious investment banker, but not for Hamad Al Mutawaa.
Mr Al Mutawaa is founder and managing director of a rising UAE financial firm, CH Stirling, but he is also a proud Emirati citizen. He had no hesitation when the call to service came earlier this year for him to do his bit for the country by serving in the army, and was happy to head off, to the applause of his Abu Dhabi family, to boot camp in Al Ain.
The timing was not perfect, however. CH Stirling had started up in the capital in 2013 when Mr Al Mutawaa teamed up with a business colleague, Chris Flinos, to launch a new kind of investment bank for the UAE.
The pair met during the financial crisis, when Mr Al Mutawaa was working for Dubai Holding, the government-owned conglomerate, and Mr Flinos was an executive with Merrill Lynch, the US investment bank involved in some of the taut negotiations over restructuring of Dubai’s debt-laden corporate sector.
They spotted what they thought was a gap in the banking market, for a client-focused, relationship-driven advisory firm that offered cost-effective and independent advice. The firm had grown significantly in its first year, advising on restructurings in the capital’s business sector and in the hotels business, which is a speciality. At the beginning of the year, it was time to take it to the next level.
Mr Flinos takes up the story: “Hamad was proud to do his duty, but we were just getting our next round of financing off the ground.
Fortunately, we have a good team in place, and he has also been available to give advice and involvement by phone and during leave. It hasn’t slowed us down at all.”
CH Stirling is in the closing stages of putting together a Dh100 million capital-raising exercise to fund the next stage of growth. It has attracted a group of investors from among the regional family and institutional community, and aims to sign the deal by the end of the year.
Then will come a move to the Dubai International Financial Centre, where every decent investment business wants to be, and a gearing up in staff numbers. It has already taken on two senior executives, Marc Aouad from the French investment house Centuria Capital and Ian Russ from Dubai’s Istithmar World, but will be looking to hire 10 more staff for its DIFC hub.“We’re keen to be seen as having the culture of a traditional merchant bank, with the characteristics of a modern private equity business,” says Mr Flinos.
One sector that has already caught CH Stirling’s eye is the fast-moving and highly-valued healthcare business, where the firm has plans to make a move into public equity markets. “Watch this space,” says Mr Flinos.
DIFC will also be a much more comfortable environment for Mr Al Mutawaa, deservedly so after the rigours of patriotic duty.
fkane@thenational.ae
Follow The National's Business section on Twitter
U19 World Cup in South Africa
Group A: India, Japan, New Zealand, Sri Lanka
Group B: Australia, England, Nigeria, West Indies
Group C: Bangladesh, Pakistan, Scotland, Zimbabwe
Group D: Afghanistan, Canada, South Africa, UAE
UAE fixtures
Saturday, January 18, v Canada
Wednesday, January 22, v Afghanistan
Saturday, January 25, v South Africa
UAE squad
Aryan Lakra (captain), Vriitya Aravind, Deshan Chethyia, Mohammed Farazuddin, Jonathan Figy, Osama Hassan, Karthik Meiyappan, Rishabh Mukherjee, Ali Naseer, Wasi Shah, Alishan Sharafu, Sanchit Sharma, Kai Smith, Akasha Tahir, Ansh Tandon
The Bio
Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”
Holiday destination: “I like Paris very much, it’s a city very close to my heart.”
Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”
Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”
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.”
MATCH INFO
Uefa Champions League, last-16, second leg (first-leg scores in brackets):
PSG (2) v Manchester United (0)
Midnight (Thursday), BeIN Sports
Company Fact Box
Company name/date started: Abwaab Technologies / September 2019
Founders: Hamdi Tabbaa, co-founder and CEO. Hussein Alsarabi, co-founder and CTO
Based: Amman, Jordan
Sector: Education Technology
Size (employees/revenue): Total team size: 65. Full-time employees: 25. Revenue undisclosed
Stage: early-stage startup
Investors: Adam Tech Ventures, Endure Capital, Equitrust, the World Bank-backed Innovative Startups SMEs Fund, a London investment fund, a number of former and current executives from Uber and Netflix, among others.