Rani Investment has set its sights on Africa's luxury tourism industry as it looks to blaze trails in to the sector, which is still relatively undeveloped in the continent.
The company is based in Dubai and owned by the Saudi businessman Sheikh Adel Aujan. It already has five resorts in Mozambique as well as a game reserve and hotel in Zimbabwe and is considering expanding in to Zambia. In addition, it is studying other opportunities in the two African countries in which it already has a presence, said Dr Kamel Abdallah, the chief executive.
"Africa in a way is the last frontier," he said. "We can call it a pre-emerging market. It has the potential to grow exponentially in a very big way."
Dr Abdallah said Rani was the largest investor in Mozambique's hospitality industry. Its flagship property there is the Indigo Bay Island Resort and Spa.
The company is also planning to develop a US$100 million (Dh367.2m) resort on an island in Mozambique known as Paradise Island. But that project has been slowed by the global economic crisis and a downturn in tourism that hit Rani's resorts.
There are a number of challenges that come with investing in Africa, Dr Abdallah said.
"We are not there to make profits overnight. We have, of course, a healthy tolerance for risk. In Africa, you need to have a healthy tolerance for risk because you do have some political instability from time to time and you do have a challenging economic environment."
He said Rani also viewed its role in Africa as part of its corporate social responsibility and was trying to employ locals rather than expatriates.
Another major challenge was the fact that the company had to put in its own infrastructure including airstrips, generators and water treatment facilities for its properties.
"It's a commitment to do it in the right way and to live with the challenges. With all these risks there is high return, which we know we will get, so it's still economically rewarding," Dr Abdallah said.
"Africa is rich. Zimbabwe is very rich. Mozambique is very rich. They are rich in natural resources and mineral resources."
Rani also has a stake in the River Ranch diamond mine in Zimbabwe. But Dr Abdallah said the company was not focusing on expansion in the mining sector, although it had claims under consideration for other mines.
"Our investment in the mining sector to this day has been very limited. It has been as a result of our decision to stay in Zimbabwe while many others were leaving. But our focus in Africa is on the tourism sector and not the mineral resources."
He explained that many investors pulled out of Zimbabwe because of its political and economic instability.
"But we decided to stay. We are there for the long term. Now Zimbabwe is recovering. Our occupancy shows that people are returning."
Sheikh Adel's Aujan Industries, which is also part of Aujan Group under the Rani umbrella, manufactures drinks under brands including Vimto.
Other companies, including Dubai World, also had a number of projects planned for several African countries but many were later put under review.
"There is something called first mover advantage," said Dr Abdallah.
"As Zimbabwe is turning around we are positioned to not only benefit but also to do more investment. We have secured the best locations in Mozambique and Zimbabwe and we secured them at a very attractive investment price, so we believe that we will get a very good return in time."
rbundhun@thenational.ae
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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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MATCH INFO
Jersey 147 (20 overs)
UAE 112 (19.2 overs)
Jersey win by 35 runs
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
The specs
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Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
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Four-day collections of TOH
Day Indian Rs (Dh)
Thursday 500.75 million (25.23m)
Friday 280.25m (14.12m)
Saturday 220.75m (11.21m)
Sunday 170.25m (8.58m)
Total 1.19bn (59.15m)
(Figures in millions, approximate)
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Pakistan v New Zealand Test series
Pakistan: Sarfraz (c), Hafeez, Imam, Azhar, Sohail, Shafiq, Azam, Saad, Yasir, Asif, Abbas, Hassan, Afridi, Ashraf, Hamza
New Zealand: Williamson (c), Blundell, Boult, De Grandhomme, Henry, Latham, Nicholls, Ajaz, Raval, Sodhi, Somerville, Southee, Taylor, Wagner
Umpires: Bruce Oxerford (AUS) and Ian Gould (ENG); TV umpire: Paul Reiffel (AUS); Match referee: David Boon (AUS)
Tickets and schedule: Entry is free for all spectators. Gates open at 9am. Play commences at 10am
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
