Russian, Afghan and Pakistan presidents meet ahead of summit

SOCHI, RUSSIA // The Russian president Dmitry Medvedev today hosted bilateral meetings with Afghan president, Hamad Karzai and Pakistani president Asif Ali Zardari ahead of a summit on Wednesday aimed at co-ordinating efforts to improve security in Afghanistan. "Let me once again thank you for your concern for Afghanistan," Mr Karzai told Mr Medvedev in their bilateral meeting. "Afghanistan will need the support of friends and great countries like Russia."

Mr Medvedev said Russia backed the Afghan government's fight against Taliban insurgents and also emphasised that Russia was prepared to develop economic relations with Afghanistan. "We live in the same region - this creates common problems and common prospects," he said. The three countries all have a troubled history of relations but Russia will want the summit to show it is playing a constructive role in improving security in a region where historically it has had a major influence.

Russia, still haunted by the Soviet Union's war in Afghanistan which cost over 13,000 Soviet lives and ended in a humiliating pullout in 1989, has kept a wary distance from the troubles of the North Atlantic Treaty Organization forces in the country. Also taking part will be Tajikistan's president Emomali Rakhmon, whose country borders Afghanistan. But the key aspect of the meeting is a rare bilateral encounter between Mr Zardari and Mr Karzai, whose country has consistently accused Pakistan's powerful intelligence agency of supporting Taliban insurgents.

Pakistan has reacted furiously to the allegations, particularly after Mr Karzai declared in July that "this war is in the sanctuaries, funding centres and training places of terrorism which are outside Afghanistan." Mr Karzai's spokesman Sediq Sediqqi said that Mr Karzai and Mr Zardari met earlier in the day, saying more details would be given later. Mr Medvedev's foreign policy advisor Sergei Prikhodko said ahead of the meeting that Russia would be interested in delivering helicopters to Afghanistan.

"The question of the delivery of Russian helicopters will be discussed, if it is raised by the Afghan side," he added, the Interfax news agency said, adding that Afghanistan required 100 additional helicopters. * AFP

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UAE currency: the story behind the money in your pockets

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.”