From left, Rashid Ahmed al Jumairi, Fabio Dias, Bianca Gentil and Abdulrahman bin Thalith were named winners of the Global Business Opportunities contest at the Global Youth Forum in Abu Dhabi. Lee Hoagland / The National
From left, Rashid Ahmed al Jumairi, Fabio Dias, Bianca Gentil and Abdulrahman bin Thalith were named winners of the Global Business Opportunities contest at the Global Youth Forum in Abu Dhabi. Lee HoShow more

Would-be magnates gather in capital



ABU DHABI // Abdulrahman bin Thalith, 26, suffered from a lack of self-confidence.

He believed that people who studied in Europe and the United States were more qualified to enter the business world, and was uncertain about his professional future.

But then, two years ago, the Emirati enrolled in a competition that taught people to think and act like entrepreneurs.

"The whole experience made me see things differently," he said. "I became good at representing myself and learning where I added value to the team. I believed in myself in a way I never had before."

Mr bin Thalith's newfound confidence was the result of his participation in the Global Business Opportunities contest, which is sponsored by the corporate social responsibility department of Al Ahli Holdings of Dubai.

In March, as part of the contest, he travelled to Brazil and teamed up with young Brazilians to create a workable business idea. He and his teammates - Rashid Ahmed al Jumairi, 26, also an Emirati, and Bianca Gentil, 22, and Fabio Dias, 26, both Brazilians - were last night named the winners of the contest at the Global Youth Forum, a conference sponsored by the British Council and Al Ahli Holdings. The team won a grant worth US$20,000 (Dh73,460) they can use to help turn their idea - an indoor football centre - into reality.

"We want to show people that as Emiratis we don't just have a lot of oil which has made us lazy, that we can make things happen and it doesn't matter what gets in our way," he said.

The two-day forum, which began yesterday, includes a series of workshops and panel discussions led by experts from a variety of business sectors. Juan Costa Climent, a Spaniard who once served as that country's minister of science and technology, made one of the opening speeches at the forum.

"Small and medium enterprises are the way in which you can lead the future," he said, addressing the audience at the National Centre for Documentation and Research.

"You have to accept the idea that you are the people who will change the future of this planet and you have to focus on your dream and take steps towards it."

The audience was filled with students from across the Emirates and a handful of young people from the UK, Jordan and Bahrain.

Melanie Relton, the British Council's regional vocational education manager, said helping young Emiratis was the forum's main goal.

"The world is getting smaller," she said. "In this region particularly, there needs to be a shift towards diversification of industry through small-business development. It is a priority for us to showcase international young talent, but also to bring people together and encourage young Emiratis to influence the path of their future."

Nouf al Hermi, 23, a Bahraini who runs an online clothing store, attended the forum to learn how to expand her business. She said operating a small business is hard work, but stressed that young people in the UAE should make the most of their opportunities.

"I set up my own business because I wanted independence. My website has paid for my university degree and enabled me to take responsibility for my life," she said. "I think in other countries, like the UAE and Jordan, they have more help for funds for small businesses. I would encourage anyone to start something up."

Another forum participant, Tom Watkins, 18, who won a British entrepreneurship contest called Make Your Mark, said it was a great opportunity for him to be able to make business connections in the UAE.

"There was a time 50 years ago when people wouldn't necessarily trade with others abroad, but now the world is truly international," said Mr Watkins, who is studying maths and economics at Exeter University.

"It is vital to make these connections. I have met lots of people already and I hope they will help me in the future."

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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