Vertu, a maker of highly expensive mobile phones, has launched its most affordable handset in the UAE yet – a mere Dh25,400.
That is the price of the Constellation, a bargain compared with the Ti, which went on sale this year for Dh39,500.
“It is a new segment for us,” said Vertu’s chief executive, Massimiliano Pogliani, who was in Dubai this week for the Constellation’s launch. “This phone has a different price point, a different design. It is more contemporary, more modern I would say, covering both segments, both male and female, whereas before our offer was pretty much very male-skewed.”
The phone might be cheap for a Vertu, and have only 135 parts compared with the Ti's nearly 200, but it still costs five times as much as the costliest mass-produced mobiles.
Featuring calf leather from one of Europe’s oldest tanneries, the Constellation comes in a galaxy of colours, including raspberry and cappuccino, which are designed to appeal to women, in addition to black, mocha and orange.
“I believe we will attract new customers to the brand with this one, both male and female, so it is a possibility for us to enlarge the market and to grow within the category,” said Mr Pogliani.
Vertu, which makes all of its phones in England by hand, will not reveal how many phones it sells in the Middle East, only that this is its second largest market after the Asia-Pacific region. It operates six mono-brand boutiques in the UAE alone.
“We have people coming in our stores every day and the more we have products like this, covering different designs and price points, the more we will have the possibility to close a sale every time we have a customer in the store,” said Mr Pogliani.
If you expect to receive Vertu’s legendary concierge service, which entitles users to book restaurants, buy gifts and obtain a host of other services by calling a network of “lifestyle managers” after buying a Constellation handset, you will be disappointed.
“This one is without concierge,” Mr Pogliani said.
“It has all the privilege parts, so we still have all the benefits associated to a Vertu customer of access to private members’ clubs or closed-door events. The concierge service is reserved for the other model … I believe also in the services we are offering we also want to differentiate between the segments.”
gduncan@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.”
