Aidan Birkett, the chief restructuring officer of Dubai World, has to work out a deal between the company and 97 creditors.
Aidan Birkett, the chief restructuring officer of Dubai World, has to work out a deal between the company and 97 creditors.

Business

The salvage specialist on the case

Aidan Birkett, the chief restructuring officer of Dubai World, has faced many challenges in his long career as a corporate turnaround specialist, but Dubai World ranks as the biggest and most complex.

Frank Kane

March 26, 2010

Aidan Birkett, the chief restructuring officer of Dubai World, has faced many challenges in his long career as a corporate turnaround specialist, but Dubai World ranks as the biggest and most complex. Before Mr Birkett, 57, was appointed to the Dubai World job last November, he was reckoned to have taken part in the restructuring of more than US$100 billion (Dh367.32bn) of corporate debt in a series of high-profile transactions for his current employer, Deloitte, and his former firm, PricewaterhouseCoopers.

If he pulls off a deal between Dubai World and its 97 creditors, he will have added significantly to that tally, and also resolved the most complex and sensitive issue on the UAE's financial agenda. Yesterday's announcement was the first step towards resolution, although the final shape of a deal could take months for Mr Birkett and his team to hammer out with creditor banks. He is well used to the process of attrition that is characteristic of these restructurings. He has clocked up years of delicate negotiation, cajoling and compromise in such corporate rescues as Eurotunnel, Cable and Wireless, Wembley Stadium and the Spanish property group Inmobiliaria Colonial.

Mr Birkett is also no stranger to controversy and a high media profile, having been involved in the restructuring of the bankrupt media empire of the late tycoon Robert Maxwell. He has been head of the 1,200-strong corporate finance practice at Deloitte in the UK since 2004. The firm says he has a "reputation for devising profit enhancement and business turnaround strategies, and for successfully advising on corporate restructurings".

A colleague describes Mr Birkett as a "no-nonsense individual who does not suffer fools gladly, and who is prepared to let his anger show if he thinks the situation demands it". Another says: "He's one of those people who, although he's been very successful and achieved a lot, doesn't just sit in the background waiting to make even more money. He's very hands-on and involved, and likes to remain client-oriented."

Mr Birkett's involvement in the Gulf has increased since he helped set up Deloitte's office in the Dubai International Financial Centre in 2006. Last year, he headed the Deloitte team that was hired by the Central Bank of Bahrain to investigate the collapse of The International Banking Corporation (TIBC), which sparked the biggest corporate scandal in Saudi Arabia when the al Gosaibi family, the owners of TIBC, accused Maan al Sanea, the head of the Saad Group, of a $10bn fraud.

Mr Birkett was in Dubai later in the year making presentations to creditors of the Ahmad Hamad Al Gosaibi and brothers group businesses, many of which are among the financial institutions with which he must now negotiate over the Dubai World proposals. A native of north-east England, he likes sport of all kinds and is a fan of Newcastle United Football Club. He was mentioned as a possible financial rescuer for the club in its recent cash distress. He is also keen on horse racing, rugby and skiing.

A friend says that, having missed the last skiing season in Europe because of the Dubai World restructuring talks, Mr Birkett is determined to reach a successful conclusion to the negotiations with creditors before the next season. @Email:fkane@thenational.ae

Real estate tokenisation project

Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

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.”

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