Tour seeks transatlantic invasion



Players from 18 different countries qualified for this year's concluding leg of the inaugural Race to Dubai - the US$7.5m (Dh27.5m) Dubai World Championship (DWC) on Greg Norman's Earth Course at Jumeirah Golf Estates. Seventeen of those countries were duly represented in the glittering finale to the European Tour season. The notable exception was the United States. Anthony Kim, who finished in 38th place on the European money list, despite playing most of his golf in his homeland, was the only American to make it into the top 60 to earn a starting place on Earth. He failed to keep that appointment, making an announcement to the effect that his parents needed to see a little more of their son.

When the announcement was made in 2007 that Leisurecorp were to sponsor the European Tour to the tune of $100m (that figure has since been trimmed by 25 per cent) it was seen as the signal for a transatlantic invasion of Americans seeking rich pickings on the other side of the pond. Phil Mickelson, the world No2, dropped a tantalising hint that he would be one of them but he, along with two of last year's major champions Lucas Glover and Stewart Cink, failed to show up often enough to satisfy the entry requirements. Argentina's Angel Cabrera, winner of the US Masters, earned enough euros to qualify for the Dubai World Championship but refused to play in the one extra tournament he needed to secure his eligibility.

Similarly YE Yang, the Korean who stunned Tiger Woods to prevail in a head-to-head battle for the fourth major of the season, the PGA Championship, was also in a healthy position to qualify for the Dubai World Championship but decided against playing in the requisite tournaments. The next objective for the Race to Dubai will be to attract more members of the bigger and stronger US Tour. It will be interesting to see over the next 12 months how many of those PGA members play in sufficient European Tour events to earn a ticket to the UAE finale.

It is unlikely that Kim, widely regarded as a future rival to Tiger Woods for world No 1 status, will be one of them after a trophyless year which he put down to excessive travelling. Camilo Villegas and Geoff Ogilvy, two of the big foreign attractions on the PGA Tour seem to view things differently. Both qualified comfortably for the first DWC and are planning to do the same again next year. With South Africa's major champions Ernie Els and Retief Goosen showing a heartening commitment to European affairs, the second Race to Dubai promises to be another cosmopolitan affair - with or without the Star Spangled Banner on the parade ground. wjohnson@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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