Minister praises Filipino expatriate foundation



ABU DHABI // Mariam Mohammed Khalfan al Roumi, the Minister of Social Affairs, has praised an initiative by a group of Filipino expatriates who set up a foundation to help their countrymen in the UAE and at home. The minister met Libran Cabactulan, the Philippines' ambassador in the UAE, on Oct 13 to discuss the Filipino Expatriates in UAE Foundation (Filex UAE). Filex plans to give scholarships to children of low-income Filipino expatriates, promote entrepreneurial activities and provide money to the victims of calamities and natural disasters in the Emirates and the Philippines.

"The minister expressed her appreciation on the establishment of Filex as an instrument of the Filipino community to provide assistance to Filipino nationals who are in great financial need," Mr Cabactulan said. Membership of Filex is open to all Filipinos living in the UAE, while other nationalities, companies and entities can become members of the Circle of Filex Advocates. As of June, there were 324,912 Filipinos in the UAE, according to official records from the Ministry of Foreign Affairs. Almost half of the community, about 120,000 people, live in Abu Dhabi and Al Ain.

Since there is no law on the formation of charitable foundations by foreigners in the UAE, Mrs Roumisaid the present arrangement would continue. "In our case, Filex is registered officially in the Philippines and operates in the UAE under the auspices of the Philippine embassy, like other foreign cultural associations," said Mr Cabactulan. Dick Orense, the Filex interim chairman, said he was pleased to learn from Mr Cabactulan that the minister had spoken well of the foundation, and that they had a productive meeting.

Filex has enlisted 1,600 members since its formal launch in August. "Most of the members had taken advantage of the one-off payment of Dh30 (US$8), equivalent to a lifetime membership," he said. Those with UAE residence visas must pay Dh15 a year towards a group accident insurance security. This entitles them to benefits including coverage for accidental death, total accident disability, payment for medical fees and repatriation of remains to the Philippines.

On Oct 21, Mr Cabactulan and Mr Orense met with Dr Ali Abdullah al Kaabi, the chairman of the Red Crescent Authority (RCA), to discuss the possibility of Filex holding joint activities with the UAE RCA and the Philippine National Red Cross. The group plans to visit Ras al Khaimah on Friday and Ruwais on Nov 27 to promote its ongoing membership fund campaign, with a goal of recruiting 100,000 members in a year's time.

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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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