MUSCAT // Oman, located strategically on the opposite side of the Strait of Hormuz from Iran, said the risk of military conflict between Tehran and the West was rising but there was still plenty of opportunity to negotiate peace.
Iran has repeatedly denied charges by western nations that it is developing the capability to build nuclear weapons, but the United States and the European Union have recently imposed tougher sanctions in an effort to convince Tehran to curb its nuclear programme.
"It is in the interest of both sides to come to the middle road," Yousuf bin Alawi bin Abdullah, the sultanate's minister responsible for foreign affairs, said at the foreign ministry in Muscat.
"We can see that the threat of an unfortunate flash of military confrontation is more possible rather than it is remote."
Oman has several times acted as an intermediary between Iran and the West.
Last year, Oman's Sultan Qaboos bin Said Al Said facilitated the release of two US hikers held by Tehran for spying, and three French aid workers held hostage by Yemeni tribesmen were freed in November after Oman negotiated their release.
Speculation has grown in recent months that Israel, with or without US support, may launch some form of pre-emptive military strike against Iranian nuclear installations, which Israel sees as a threat to its existence.
Talks over its nuclear programme have been on and off over the years, but last week Iran said it would welcome a new round of nuclear negotiations with world powers.
Iran spooked oil markets in late December when it threatened to close the Strait of Hormuz, where a fifth of global oil exports pass, if there were any military strikes against the country or its nuclear facilities.
Asked about the risk of a Western military strike on Iran, Mr Abdullah said: "Still there is time, but not long, to seize opportunities ... to find a solution to this conflict."
He said there was also a risk Western concerns over Iran's nuclear programme could get out of hand, and called for more focus on establishing facts on the ground.
In office since 1982, Mr Abdullah said Oman was doing its best to secure the Strait of Hormuz, through which an average of 14 crude oil tankers pass each day. The US Fifth Fleet, based in Bahrain, regularly patrols Gulf waters and frequently passes through the strait.
"We are doing our best to keep this waterway open for the benefit of international trade and flow of energy to the rest of the world," Mr Abdullah said. "But there is no guarantee, once the situation is broken, we cannot offer alternatives.
"Because we are maintaining a good relationship with both sides [Iran and the West], when we feel there is an opportunity to give an advise for both sides, we do so," Abdullah said.
"We understand the concern of the international community, and we also understand the view of the Iranian government."
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Name: Shamsa Hassan Safar
Nationality: Emirati
Education: Degree in emergency medical services at Higher Colleges of Technology
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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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Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
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