ABU DHABI // Encouraging a culture of giving is fundamental to the UAE's leadership, a philanthropy summit was told today.
Sheikha Lubna Al Qasimi, Minister of Development and International Cooperation, told delegates the UAE aimed to tackle a range of social problems.
“We wish to create an impact on the lives of a large number of people,” she said. “We want to deliver real sustainable results in relation to the problems that we seek to tackle.
"As a country we have always believed that giving back is important and understood that we must help less fortunate members of the community.
“We want to impact the lives of hundreds of thousands of young people. We want real results in the problems we want to tackle.
“It has been challenging, but we are now in a better position to create change and real social impacts.”
Sheikha Lubna was addressing the Emirates Foundation Philanthropy Summit 2013, and is a member of the organisation’s board.
The conference, at Jumeirah Etihad Towers in Abu Dhabi, highlighted that business models were now being adopted by philanthropic organisations to ensure money was not wasted.
“This summit aims to discuss philanthropy in transition,” Sheikha Lubna said. “It will look at the current structural changes under way in the sector.
“There is growing recognition that philanthropic capital can play a critical role in driving socio-economic development.”
Experts representing major charities attended the event, which ends tomorrow, to discuss the challenges of how to measure the success of philanthropic initiatives.
“Emirates Foundation has undergone a transition in the last few years from traditional philanthropy to venture philanthropy – we hope this is more strategic and can create more impact,” said Claire Woodcraft, chief executive of the Emirates Foundation.
“We want to encourage a great dialogue and learn from others.
“We are here to change the lives of young people positively but permanently – we don’t want quick fixes, we need long-term systemic solutions that can create social value.
“There is a growing demand for philanthropists to be accountable and to not just focus on their successes but also recognise when something is not working.”
Measuring the impact of organisations’ work can be challenging.
“What we have done is look at each of our individual programmes and continuously monitor them and evaluate them,” Ms Woodcraft said. “It is not just about how much you invest. It shifts the discourse from inputs to outputs.”
“Just because you have a huge budget, does not mean that you will get successful social outcomes.”
Measuring the extent goals have been achieved and making the most of money given is important to global organisations as well as those in the UAE.
Representatives from the Gates Foundation and Shell Foundation took part in a panel discussion and stressed the need to measure the results of the work they carry out to ensure that failing enterprises are not allowed to continue to operate.
The Emirates Foundation now hopes to forge new partnerships and ensure that youths are given the best possible chance in life.
A range of “challenge sessions” at the summit tomorrow will look at individual case studies of work being carried out across the region.
A delegation of young people from Kuwait are among those invited to the summit and will tour UAE landmarks with 25 Emiratis to share their experiences and insights.
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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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