Conservative president election candidate and former prime minister Jaroslaw Kaczynski speaks just after the first unofficial results of presidential elections, on Sunday, June 20, 2010.
Conservative president election candidate and former prime minister Jaroslaw Kaczynski speaks just after the first unofficial results of presidential elections, on Sunday, June 20, 2010.

Kaczynski heads to run-off vote



WARSAW // The socially conservative twin of the late Polish president was headed for a run off today with the moderate, pro-European leader who took his brother's place after he died in a plane crash. The outcome is expected to shape the country's direction on a wide range of issues, including the adoption of the euro, welfare reform and even its mission in Afghanistan. Jaroslaw Kaczynski and interim president Bronislaw Komorowski will face each other on July 4 after neither was able attain the 50 per cent needed for outright victory.

Mr Kaczynski's policies are essentially identical to those of his deceased brother and he would be widely expected to pursue the same platform. Lech Kaczynski was killed along with his wife and 95 other people after their plane crashed trying to land in heavy fog in Smolensk, Russia, on April 10. Lech Kaczynski, often considered the less forceful and charismatic of the two brothers, favoured a strong welfare state and was sceptical of closer ties to the EU. The Kaczynskis' base is made up of older, rural and observant Catholic Poles who favour upholding the country's strict abortion laws and oppose gay rights.

Mr Komorowski is a leading member of the pro-European Union, moderate Civic Platform party, which governs the country. He has pledged to work closely with the government to adopt the euro in about five years, end the unpopular military mission in Afghanistan and promote pro-market reforms. Observers say the close results should spur Mr Komorowski to invigorate his lacklustre campaign and seek new supporters. Worried former president Lech Walesa ? a long-time foe of the Kaczynski twins ? pledged his support.

The president is elected for a five-year term separately from the prime minister and his government. Although many of the duties are symbolic, the president can veto laws and, as commander in chief, has influence over foreign military missions. As president, Mr Komorowski would give prime minister Donald Tusk's government a green light for further pro-market reforms in this eastern European country of 38 million - the largest of the ex-communist countries to join the European Union in recent years.

Based on more than 94 per cent of voting stations reporting, Mr Komorowski had 41.22 per cent of the votes and Kaczynski had 36.74 per cent, the state electoral commission said. Turnout there was 54.85 per cent. Full official results are expected later in the day. Political analyst Wojciech Jablonski said the results were a defeat for Mr Komorowski's campaign team, which was drawn from Tusk's governing Civic Platform party.

"If they don't breathe life and energy into the campaign, Kaczynski will win, just like in the 2005 elections," Mr Jablonski said, referring to Lech Kaczynski's unexpected win then over favoured Tusk. Mr Komorowski needs to find more backers, most likely among voters for centre-left candidate Grzegorz Napieralski, the third place winner Sunday who won almost 14 per cent of votes - a stronger than expected showing.

Already on Sunday Komorowski, 58, asked Poles for more support and specially congratulated Mr Napieralski, whose Democratic Left Alliance is the heir to the former communist party. It was a notable gesture from a former anti-communist. Mr Kaczynski, a former anti-communist himself who has made it a mission in recent years to root former communists out of public life, also made a point of praising Mr Napieralski in his speech on Sunday night. He noted that Mr Napieralski had made a constructive gesture of proposing talks on reforming the health system.

Mr Napieralski said he would travel and meet with his supporters before deciding who to endorse. * AP

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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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