The Russian president Dmitri Medvedev speaks at an event hosted by the Council on Foreign Relations at the Washington Club yesterday.
The Russian president Dmitri Medvedev speaks at an event hosted by the Council on Foreign Relations at the Washington Club yesterday.

The Americas

Medvedev calls for talks with Obama

The Russian president Dmitri Medvedev wants talks with Barack Obama as soon as the US president-elect takes the oath of office.

WASHINGTON // The Russian president Dmitri Medvedev has called for talks with Barack Obama as soon as possible after the US president-elect takes the oath of office. On his first visit to the United States since becoming Russia's president in May, Mr Medvedev reached out to the incoming US administration. He said yesterday there was a lack of trust between Russia and the United States, but he hoped this would change when Mr Obama became president Jan 20.

Mr Medvedev said it was "in our power" for Russian-American relations to be "truly a partnership." He said it was not particularly important what issue he and Mr Obama chose to discuss at their first meeting. "The main thing is that the meeting takes place and that it takes place quickly," said Mr Medvedev, who was in Washington for the global financial summit. But he suggested that US plans to build a missile defence system in Eastern Europe would be a good place to start. Just hours after Mr Obama won the presidential election, Mr Medvedev issued a challenge, warning that Russia would move short-range missiles to NATO's borders to "neutralise" the missile defence system if necessary.

Mr Medvedev has since backed off slightly. He stressed yesterday that Russia would not act unless the United States took the first step and expressed hope that the Obama administration will be open to negotiations. "I hope that the new president, the new administration will have a desire to discuss this," Mr Medvedev told members of the Council on Foreign Relations. "At least the first signals that we have received indicate that our new partners are thinking about the problems and do not simply plan to rubber stamp the plans."

The Russian president gave a short speech and then settled into an armchair next to the former Secretary of State Madeleine Albright to continue the discussion with her. The choice of Ms Albright carried additional significance since she acted as a surrogate for Mr Obama at the summit. When asked about the missile defence system, Mr Medvedev returned to the lectern. He said he would not speak "as emotionally" on the issue as the French President Nicolas Sarkozy but needed to stand to address the issue properly.

Mr Sarkozy caused waves by criticising the planned missile defence system on Friday, saying it would not make Europe safer. But he backed down yesterday. The Bush administration has insisted the planned missile defence system in Poland and the Czech Republic is aimed at protecting Europe from Iran. But Russia sees the plans as a Cold War-style project that could eliminate Russia's nuclear deterrent.

Mr Obama has not been explicit about his intentions, saying it would be prudent to "explore the possibility" but expressing some scepticism about the technical capability of US missile defences. Mr Medvedev said he did not time his Nov 5 speech - his first state of the nation address - to coincide with Mr Obama's election. He had postponed the address twice, which he said yesterday was because he was unhappy with the material that had been prepared.

When he finally set the date, he said he forgot about the US election. "It was nothing personal," he added. *AP

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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia

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.”