#48 - December 2018 by CPI Financial

WEALTH ARABIA

ISSUE 48 | DECEMBER 2018

DECEMBER 2018

Rethinking sustainability

Patrick Odier, Senior Managing Partner, Lombard Odier

Rethinking sustainability

Patrick Odier, Senior Managing Partner, Lombard Odier

A CPI Financial publication

Dubai Technology and Media Free Zone Authority

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Contents ISSUE 48 | DECEMBER 2018

EDITOR'S LETTER Greetings all,

elcome to the 48th issue of WEALTH Arabia. It was such a pleasure meeting all of you at the WEALTH Arabia Summit 2018. The buzz in the room, and since, has shown that this truly has become the even that we envisined it would be. It is an vital, engaging platform for high net worth individuals and investors to speak honestly about the issues facing them with world-renowned experts and professionals. Thank you so much for coming, and we look forward to seeing all of you again next year. There is plenty to look at in this issue. For those that missed the WEALTH Arabia Summit 2018—for shame!—there are some highlights to be found within. Also, later in the issue, you’ll find Sotheby’s global head of watches tracing the whole journey that the Middle East has taken on the way to becoming one of the best watch markets in the world. Beyond that, there’s still much to explore. I hope you enjoy it. Till next time,

William Mullally 4

OPINION The right time to buy and sell

NEWS & ANALYSIS The latest analysis from the investment world

ADVERTORIAL Sobha Realty IMKAN

12 52

COVER STORY Patrick Odier, Senior Managing Partner, Lombard Odier

WEALTH ARABIA SUMMIT 2018 Key issues faced by HNWIs addressed at WEALTH Arabia Summit Increasing the number of women investors Uncertainty provides opportunity

22 26 32

PRIVATE BANKING A vision for private banking

INVESTMENT All eyes on trade in 2019

P.O. Box 502491, Dubai Media City, UAE Tel: +971 4 391 4681 Fax: +971 4 390 9576

TRAVEL WEALTH Arabia visits Bilbao, Spain

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CELEBRITY INTERVIEW Saudi Arabia’s comedy star

CHAIRMAN

Saleh Al Akrabi

MOTORING Mercedes AMG GT-4 Door Coupe

PRODUCTS The birth of the Middle East watchcollecting community A lunar complication

CHIEF EXECUTIVE OFFICER

EVENTS The WEALTH Arabia Summit 2019

STEVE LEE steve.lee@cpifinancial.net Tel: +971 4 391 4681

EDITOR - WEALTH ARABIA

WILLIAM MULLALLY william@cpifinancial.net Tel: +971 4 391 3718

BUSINESS DEVELOPMENT MANAGERS

EDITORS

MATT AMLÔT matt@cpifinancial.net Tel: +971 4 391 3716

DANIEL BATEMAN daniel@cpifinancial.net Tel: +971 4 375 2526

NABILAH ANNUAR AKASH AMBALE nabilah.annuar@cpifinancial.net akash.ambale@cpifinancial.net Tel: +971 4 391 3726 Tel: +971 4 433 5320 ISLA MACFARLANE NEEMA SAJNANI isla@cpifinancial.net neema.sajnani@cpifinancial.net Tel: +44 7875 429476 Tel: +971 4 391 3717 ADVERTISING

EDITORIAL

sales@cpifinancial.net

editorial@cpifinancial.net WEB EDITOR

EDITORIAL ASSISTANT

JESSICA COMBES jessica@cpifinancial.net Tel: +971 4 364 2024 CHIEF DESIGNER

KUDA MUZORIWA kuda.muzoriwa@cpifinancial.net Tel: +971 4 391 3729

BUENAVENTURA JALUAG, JR. jun@cpifinancial.net Tel: +971 4 391 3719 DIGITAL MANAGER

SIYAMUDEEN PAINAYIL siya@cpifinancial.net Tel: +971 4 391 3722

SENIOR DESIGNER

FLORANTE MAGSAKAY florante@cpifinancial.net Tel: +971 4 391 3724

EVENTS MARKETING MANAGER

CRIS BALATBAT cris.balatbat@cpifinancial.net Tel: +971 4 391 3725

FINANCE & DATA MANAGER

FINANCE & DATA EXECUTIVE

HR & OFFICE MANAGER

ADMINISTRATION & SUBSCRIPTIONS

SHAIS MEMON, ACCA, CMA Shais.memon@cpifinancial.net Tel: +971 4 391 3727 RIZZA INFANTE rizza@cpifinancial.net Tel: +971 4 391 4682

KHALED TAHA khaled.taha@cpifinancial.net Tel: +971 4 433 5322

CAROL BASA carol@cpifinancial.net Tel: +971 4 391 3709

enquiries@cpifinancial.net WEALTH ARABIA ISSUE 48 | DECEMBER 2018

DECEMBER 2018

Rethinking sustainability Patrick Odier, Senior Managing Partner, Lombard Odier

A CPI Financial publication

Dubai Technology and Media Free Zone Authority

WEALTH WARNING! Remember, if you wish to act on any of the information you read in WEALTH Arabia, consider taking independent advice first. WEALTH Arabia is written for a general audience and the information contained herein may not be appropriate for your personal circumstances. Don’t miss your copy of WEALTH Arabia. Subscribe now, full details at: www.wealtharabia.net and on Twitter @wealtharabia.

©2018 CPI Financial. All rights reserved. No part of this publication may be reproduced or used in any form of advertising without prior permission in writing from the editor. Printed by United Printing & Publishing - Abu Dhabi, UAE

PUBLISHED BY CPI FINANCIAL FZ LLC REGISTERED AT DUBAI MEDIA CITY, DUBAI, U.A.E.

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12/11/2018 11:24

OPINION

The right time to buy and sell

William Mullally

his year has seen the volatility that investors have become accustomed to in the last few years continue onwards. As the bull market gets longer in the tooth and more moody than those of previous decades, it is impossible to tell a simple story of the investment landscape. While many are still heavily weighted towards the overpriced developed markets that are already showing signs of a correction, the rest of us are asking ourselves one basic question—where’s the real value? The answer to that isn’t easy, and I’m sure that you’ve gotten conflicting views from the experts you have spoken to. While there’s much we can agree on, it has become harder to find the best place to weight your portfolio— or the right time to move into a new market, or leave one a bit over-ripe. Many of us are looking towards early 2019, twiddling our fingers with anticipation, like Indiana Jones hovering over the golden statue, holding a bag of sand. Markets such as China and South Africa stand out

as strong possibilities, and many have new ideas on how to get involved in the growth industries such as sustainable energy and artificial intelligence. In recent weeks, we’ve seen US markets in particular take a downturn, with equities dropping across the board, with no other place for investors to hide. The corrections are happening, and the question is, what the ‘correct’ value markets will land on will end up being. As always, the media on the whole incorrectly frames any downturn, with headlines often reading that investors lost some astronomical figure in one day—but every time I see a headline like this, I’m reminded of the old truism— you only lost if you sold. Of course, there are many with calmer heads who are still selling off in certain areas, likely to reposition themselves for 2018 and leave the market for the time being, after the trillion dollar repatriation overheated the US market earlier this year. The next year should be interesting times indeed—I can’t wait to continue the conversation with you then.

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eadquartered in Dubai, arguably the luxury capital of the new world, Sobha Realty brings you an exquisite and rare collection of coveted real estate at the most sough-after locations in the world, offering unmatched experiences for those who seek the finest, including an eclectic gathering of royalty and modern-day czars. Artfully created by master designers and crafted to the highest level of detail, these developments set the benchmark for the world’s finest real estate. Sobha Realty is the personal obsession of the Founder & Chairman, Mr. PNC Menon, founder of one of the world’s most successful and respected real estate companies—

the Sobha Group. The legend was born way back in 1976 in Oman where Mr. Menon established the roots of company with very humble beginnings but with a passion and determination to create the very best in terms of quality and craftmanship. Within a very few years through sheer perseverance and demonstrated excellence, the company went on to work for the royalty of Oman, Bahrain, Brunei and the President of Tajikistan. He spent the most glorious part of his career designing and developing palaces, royal facilities and mosques. The Grand Mosque in Muscat bears testimony to his work. Over the course of 8 years, he developed a strong bond with Oman, a country which provided him with a strong foundation and

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‘backbone’ that has enabled him to achieve greater success in the years ahead. In 1995, he and his family and were granted Omani citizenship. This recognition symbolises Mr. Menon’s strong and lifelong connection with the Gulf. Mr. Menon expanded his business footprint in 2003 to Dubai, the business capital of the Middle East. Dubai’s world-class infrastructure, sustainable economic growth and access to international talent made this an ideal location to establish SOBHA Middle East, a privately-held company with plans to diversify across GCC and some other regions in Asia and Europe with focus on luxury residential development, construction, glazing, metal works and furniture manufacturing. Today, Sobha Realty is the foremost backward integrated company known in the world with all the key competencies and in-house resources to deliver a project from 14

conceptualisation to completion. With a reputation for unmatched construction and interiors, as of September 2017, Sobha Group in India has completed about 95 million square feet of area. With a 40-year tradition of developing world-class homes and offices, our founder decided it was time to raise the bar even higher. Focusing on his belief that the 3 key elements that make a great home are great design, unmatched service and uncompromising quality, Mr. Menon seeks to create sublime environments that would be home to the world’s most discerning. With a single-minded focus to build a brand that consistently delivers the highest level of design, workmanship, and service, he pursues his vision to create the very best, for the very best. Mr. Menon personally spends countless hours traversing the globe understanding trends and evolutions in living. Imbibing the best of Asian hospitality and Western aesthetics, he lives and breathes the values of Sobha Realty with an almost monastic devotion. With Sobha Realty, we present homes which embody the founder’s vision of the finest in luxury living.

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COVER STORY

Patrick Odier

COVER STORY

Rethinking sustainability Patrick Odier, Senior Managing Partner, Lombard Odier, writes exclusively for WEALTH Arabia about why ESGconscious investment is becoming a necessity

ARE YOU READY? t Lombard Odier we believe the world has reached a tipping point. Our world is changing and we have to change with it. Our current global model is not sustainable, and this challenge goes way beyond the single, albeit very important, issue of climate change. It is one of five megatrends that are set to have an undeniable effect on the world we live in. Those effects are already being felt. Our population has grown 70 per cent in the last 70 years and will grow by another one billion people over the next decade. We use resources 1.7x faster than the world can replace them every year, and too many people are still excluded from access to capital, basic goods and services, and healthcare. Climate change is exacerbating all of the above, creating both physical and transition risks, and technology is changing our lives at an extraordinary pace. According to the World Economic Forum, the pace of the digital revolution is such that 65 per cent of children will have jobs that do not even exist yet.

A CHANGING WORLD These forces will have a transformative effect on our economies. Companies will have to find new ways of doing things. Many will have to change what they produce, find new innovative solutions, and adapt to rapidly changing demands from regulators and consumers. Transition means risk, but it also presents substantial opportunities. Needless to say, companies that are prepared and well positioned for a more sustainable world are more likely to thrive and prosper. From an investorâ&#x20AC;&#x2122;s perspective, this also requires change. Investors have to look at companies in a much broader way than before in order to locate sustainable returns over the long term. Change is coming and it will affect every company and every sector in every corner of the globe. We will have to disrupt many of our systems and processes on a profound scale, fundamentally changing how we do some of the most simple day to day tasks. Take, for example, transport. Demographic change will lead to higher mobility, migration, urbanisation and a huge increase in the volume of people wealtharabia.net

COVER STORY

transport systems have to carry. At the same time, resources are getting scarcer, affecting the cost efficiency of current transport models. Carbon emissions will increasingly need to be reduced and avoided to fight climate change. This is highly likely to mean a significant increase in the cost of carbon in the coming years, a trend which is already becoming apparent. As a result, we need to rethink transportation. It needs to be more scalable, fast, efficient and emission free. Other sectors face the same challenges, including food systems, education, health care and many more, including how and what we recycle. IT IS NO LONGER A CHOICE We are at a tipping point because there is no longer a choice of whether or not to adapt. The forces driving change are increasingly formidable. The transparency and accountability that comes with more, and more readily available, information is already changing how consumers behave and what they buy. It is also changing how they vote. Consequently, the political agenda is changing too. A critical policy milestone was recently reached, when global governments came together to both adopt the 17 Sustainable Development Goals, and to sign up to the Paris Agreement to limit global warming to well below two degrees centigrade. These agreements put us irrevocably on the path towards a sustainability revolution. Today, change is not just inevitable. It is highly likely to accelerate. Even with the rulebook for implementing the Paris Agreement now agreed at COP24 in Poland last month, the current commitments made under the Paris agreement will not be enough to achieve its objectives. Countries will have to implement reform harder and faster than they currently are, and this will start to take hold in the very near future. The EUâ&#x20AC;&#x2122;s new Action Plan for Financing Sustainable Development is one example of how far and how fast regulatory change is starting to happen. 18

Carbon emissions will increasingly need to be reduced and avoided to fight climate change. This is highly likely to mean a significant increase in the cost of carbon in the coming years, a trend which is already becoming apparent.

COVER STORY

PHOTO CREDIT: Shutterstock/anatoliy_gleb

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COVER STORY

And, of course, capital markets are not blind to this. There is already a significant shift underway in how money is being put to use in the economy. WHO HAS TO CHANGE? In a complex ecosystem like our global economies, everyone has a part to play in developing a more sustainable system. Companies are responsible for making sure they adapt in a smooth, orderly manner. This will be essential if they want to continue to grow and attract capital. It also means providing more transparency and disclosure to allow investors to make more informed decisions. Asset managers also have to adapt and innovate. It is essential to find better ways of working out how sustainable companies and countries really are, and where their strengths and weaknesses lie. Asset managers also have a critical role to play in encouraging companies along the road to orderly transition. Asset owners are also important players. Demand is perhaps the strongest force for change. If asset owners ask the right questions of their managers and the companies they own, and direct more of their capital towards sustainable businesses, their voices quickly build into a roar that is very difficult, if not impossible, for companies to ignore. Asset owners can do this by defining their long-term beliefs, values and objectives. What level of carbon emissions or water consumption do they want to target? How important are the sustainable development goals? Increasingly, we see asset owners focusing not just on what money is made, but how that money is made. This is a vital ingredient for our future sustainability. HOW DOES CHANGE HAPPEN? This process has evolved over the years. Exclusions out of a sense of social responsibility were a popular first step because some things just donâ&#x20AC;&#x2122;t belong in a portfolio or in the capital markets. 20

According to the World Economic Forum, the pace of the digital revolution is such that 65 per cent of children will have jobs that do not even exist yet.

At Lombard Odier, we have group-wide exclusions on controversial weapons and essential food commodities. While exclusions are a very efficient way of expressing investorâ&#x20AC;&#x2122;s values, they do not necessarily support and drive the change within a sector. There is still always someone on the other side of that trade. The next step is to look at sustainability through the lens of risk mitigation. Considering nonfinancial Environmental, Social and Governance (ESG) criteria can be used to mitigate risk effectively. Rather than taking an exclusion approach, we believe it is more impactful and effective to differentiate between the best and worstâ&#x20AC;&#x201D;essentially promoting the best students in a class and limiting our exposure to those who prove less willing or able to adapt. Given the scale and pace of the sustainability revolution, we believe it is going to be the biggest driver of investment returns in the future. We are therefore building and improving our processes for identifying the business models that are best placed to benefit as our economies continue to transform. At Lombard Odier, we have a long and prestigious history of thinking sustainably. This was built into the foundations of our bank, and is a large part of why, 222 years later, we are still going strong. Our independent, partnership structure gives us the flexibility to think in generational terms, not quarter to quarter. We believe this makes us uniquely positioned to generate returns for our client as the Sustainability Revolution continues to unfold.

COVER STORY

Patrick Odier, Senior Managing Partner, Lombard Odier

WHAT ARE THE THREE PILLARS? When it comes to integrating sustainability into portfolios today, we take a three-pillar approach. We believe these pillars are interlinked and interdependentâ&#x20AC;&#x201D;take one away, and the whole system is much more vulnerable to collapse. Our first pillar assesses the sustainability of the financial model. Can a company continue to generate excess economic returns? Is it likely to maintain its credit quality and solvency? The second pillar looks at the sustainability of their business practices. How well is the company run in the context of its broader ecosystem of stakeholders? This is where ESG criteria are employed. Data is a really important factor in creating more sustainable outcomes. The more non-financial data, and the more robust it is, the easier it becomes to root out biases in the system, and get a true understanding whether companies are genuinely transitioning to more sustainable business practices. But sustainability is about so much more than just ESG. This is why our third pillar looks at the sustainability of companiesâ&#x20AC;&#x2122; business models. As our economies continue to transform, how are sectors likely to benefit? How do they need to change? Can coal continue to compete in a world where the cost of renewables is rapidly decreasing? How will that affect the value of unburned fossil fuel assets that are currently marked to market on the balance sheets of energy companies? What are the energy sources of the future? We also believe strongly in the importance of active ownership. Stewardship is is a valuable tool to help companies transition in an orderly fashion, to adapt and increase their resilience. Dialogue and engagement can help influence companies into adopting a more sustainable operating model. When we put all of this together, it becomes easier to see the sustainability revolution for what it isâ&#x20AC;&#x201D;the biggest driver of investment returns in modern history. It will require us to fundamentally rethink sustainability, rethink investment and, in fact, rethink everything. wealtharabia.net

WEALTH ARABIA SUMMIT 2018

Kay Van-Petersen, Global Macro-Strategist, Saxo Bank

WEALTH ARABIA SUMMIT 2018

Key issues faced by HNWIs addressed at WEALTH Arabia Summit Over 30 industry-leading experts gathered in Dubai to discuss how the future of the global wealth market will evolve

he WEALTH Arabia Summit unveiled investment trends looking toward 2019, share actionable investment advice, and addressed key issues facing individual investors as it held a oneday exclusive event for more than 200 qualified decision-makers including over 100 high-net worth individuals, family offices, wealth managers, private bankers, real estate investors and senior investment executives on 29 November 2018 at the JW Marriott Marquis Hotel in Dubai. The Summit was held amid a rapidly changing global economic environment and geo-political developments that is forcing the investor community to re-think their strategy and find new opportunities despite challenging times. It aimed to equip HNWIs to come up with informed decisions on how to manage their portfolio and grow their wealth. Over 30 industry-leading experts shared their expertise on significant topics with careful consideration on the Arab investor profile. The event was packed with insightful discussions starting with six keynote topics on vital trends shaping the investment space. The conference began with opening remarks by William Mullally, Chairman of the WEALTH Arabia Summit and Editor of WEALTH Arabia.

“The recent upgradation of Saudi equity markets by the MSCI to its group of emerging markets will help the country attract billions of dollars into MENA’s biggest stock exchange, which has a market capitalisation of $500 billion. Despite risks, the country has already received the attention of the global investor community and following further reforms, we expect the Kingdom’s economy to attract a large pool of investment and talent pool to spearhead the execution of large-scale projects. These developments offer greater opportunities for the global investor community—who are already taking note of the changes and have already started to shift their investments in to the GCC,” said Mullally. Kay Van-Petersen, Global MacroStrategist at Saxo Bank, gave the first keynote and discussed global macro inflection points—trading opportunities and risks in 2019. The presentation ran through the challenges facing global macro and long-term investors, highlighting geopolitical role on market prices and analysis of top trends that will affect money in 2019 as well as identifying top priorities for investors for 2019 onwards. “There’s always a lot of people you will meet who will try to be the smartest people in the room. I’m always trying to be the guy making the most amount

of money in the room. But just because you’re making money doesn’t mean you’re right, and just because you’re losing money doesn’t mean your wrong,” Van-Petersen said. Salah Shamma, Head of Investment—MENA Equity at Franklin Templeton, spoke on Saudi Arabia’s opening economy, the biggest Arab economy that is undergoing massive reforms that might change the economic landscape of the Gulf. “There are decades where nothing happens, and weeks where decades happen. I think this is quite true for what is happening in Saudi Arabia. For years, experts agreed that Saudi Arabia was heavily dependent on oil, and it lacked the ability and will to affect the needed change in order to diversify its economy away from oil. The capital markets both in the fixed income and equity side were not available to international investors such as ourselves, and that is an essential prerequisite to the development of any economy,” said Shamma. “It took the crash of oil prices in 2014 and the rise of a young dynamic leader that kickstarted a wide, comprehensive reform programme that has been quite far-reaching in its effects, that is set to change the very fabric of Saudi Arabia’s economy, as well as further social implications. That reform programme is the cornerstone wealtharabia.net

WEALTH ARABIA SUMMIT 2018

William Mullally, Editor, WEALTH Arabia

of the vision 2030 that the government has articulated, and it is this vision that is guiding the economy right now,” Shamma continued. Alex Gemici, Founder and CEO at Greenstone Equity Partners discussed the forces driving today’s alternative investment industry, where these driving forces are foreseen to take the industry over the next five years and focused on core asset classes of private equity, hedge funds and venture capital. As the world embraces the Fourth Industrial Revolution (Industry 4.0), digital disruption is changing everything, including the financial markets and how business is done. Noor Sweid, General Partner at Global Ventures, expounded on the technological developments that investors should watch out for in 2019 and how these can shape investment strategies, and gave an overview of new technology on the horizon and explore investment opportunities and analyse ROI potential. The summit also discussed sustainable investment led by Dr. Niels Zilkens, Country Team Head, 24

Arabian Gulf and NRI at UBS Wealth Management, and what opportunities lie for socially responsible investment, why investors should add it to their portfolio and what ROI can be expected. Lastly, the topic of Innovative Asset Management & Added-Value Strategies in Real Estate was discussed by Zachary Cefaratti, Chief Executive Officer of Dalma Capital. Real estate remains to be one of the biggest investment preferences. This presented a good understanding on property investment intricacies to guarantee safe return on investment, and secure bigger returns by developing one’s instinct to know when to purchase or sell, or what property to invest on. The second half of the summit zeroed in on three investment forums. First, the WEALTH Arabia Summit launched its first annual Women’s Investment Forum that had some of the leading women in the investment and personal finance space address the reasons surrounding the gender investment gap and advise women how to develop their portfolio in line with their priorities.

The Summit also hosted discussions on family affairs and real estate investment. The Family Affairs stream focused on succession planning and the issues relating to the transition of wealth to the next generation. It provided HNWIs and family businesses valuable insight on investment strategies to secure their children’s future and explore citizenship and residence programmes as well. The Real Estate Investment Forum explored the hottest trends and opportunities in global real estate, benefits of evolving cross-border capital flow and add-value strategies that investors may opt for to get good return on their investments. According to the report published by Global Wealth Migration Review, host country UAE is home to 3,820 multi-millionaires with net assets of $10 million or more. There are also around 1,660 ultra-millionaires living in the country with net fortune of at least $30 million and another 240 individuals with at least $100 million. People living in the UAE together hold $925 billion in net assets (or wealth). Around $470 billion (51 per cent) of this is held by HNWIs. The average person living in the UAE has net assets of approximately $99,000 (wealth per capita). This is well above the worldwide average. “The UAE is the third most popular country to attract HNWIs. In 2017, the country attracted 5,000 HNWIs, lower than the United States that attracted 9,000 and Australia which attracted 10,000 HNWIs,” according to the report. Carefully selected keynote topics and speakers solidified the summit’s objective of providing actionable investment advice. Mullally added, “Thankfully, in 2019, there is no ‘get rich quick’ scheme to be had—nothing to give more calm heads the oft misleading fear of missing out and point them in a rash direction. What we’re left with is the sort of landscape which is difficult to navigate as an inexperienced investor, but on which the greatest thrive.” Sponsors for WEALTH Arabia Summit 2018 include Sobha Realty, CS Global Partners, IG, and FFA Private Bank. Exhibitors include INSEAD, Invest Cyprus, Aristo Developers, Pafilia, KHGP and KIBRA.

WEALTH ARABIA SUMMIT 2018

Increasing the number of women investors During the Women’s Investment Forum at the recently held WEALTH Arabia Summit, a panel of female investors looked at the low number in the space, possible explanations, and how it can be improved, writes Jessica Combes, Chairwowman of the first WEALTH Arabia Women’s Investment Forum

Jessica Combes, Web Editor, CPI Financial

growing number of headlines lauding the rise of the female entrepreneurs in the Middle East suggests growing support from the public and private sectors to fund female entrepreneurs—but there is still one major problem. ArabNet reported that the percentage of woman-led startups that were funded in 2016 rose to 26 per cent compared to 14 per cent a year prior, though female founders remain a minority in the Middle East, which has a very

WEALTH ARABIA SUMMIT 2018

specific reason, according to Inc. Arabia: The shortage of women investors. Speaking at the WEALTH Arabia Summit this year, panelists at the Women’s Investment Forum tackled this issue. Christiane Haber, CEO, FFA Private Bank, said, “We have around 300 active clients HNWI in the Dubai office and zero women investors. We had three and they relocated, but that is still three out of 300. We have to change those numbers.” Noor Sweid, General Partner, Global Ventures added that her fund

has 18 investors and of those one is a woman—and it’s not for lack of trying to bring more women on board. When addressing why these numbers are so low, Haber started the discussion by addressing the cultural view of the region. “I think we [women] started working around 50 years ago, I mean to going to a job and generate some money. Around 10 years ago women started to have a career. Before, we’d rely on our brother, father, or a male figure to run the investments.

Previously even if you had a lot of your own money, you’d still rely on a man to investment for you—that was the case when I look at my mother, or other women. But I think the mindset is starting to shift now.” She added that another reason for fewer women investors is that they tend to be more risk averse. “They hate to take risks and they hate the volatility in the market and they don’t want to be subject to this volatility. But if they invest in the long run, the volatility doesn’t really matter.” wealtharabia.net

WEALTH ARABIA SUMMIT 2018

Dina El-Shenoufy, Chief Investment Officer, Flat6Labs said the issue needs to be looked at by taking a step back. When she is asked why she only has an average of 20 per cent female entrepreneurs she says that in order to get that number up to 50 per cent at least 50 per cent of the applications need to be female, which is not the case. “You have to think of the source to begin with. To be a female investor, you must have acquired the wealth that will allow you to invest. So, you need to go even further back to see how to create the wealth. Maybe that’s what we need to discuss in terms of creating more female investors.” She also disagreed on the idea that women in the region are somewhat financially helpless and rely on men to manage the finances, when statistics show that women are much better financial planners within their domestic finances than men. “Contrary to popular belief, not being emotional and volatile in how we make investments makes us better investors, and even though we’re referred to as risk averse I think that is another way of saying we’re not volatile and we invest long-term, which is a value add. It’s not something that needs to be looked at as a negative sense. It’s okay for our female investors to

You have to think of the source to begin with. To be a female investor, you must have acquired the wealth that will allow you to invest. So, you need to go even further back to see how to create the wealth. Maybe that’s what we need to discuss in terms of creating more female investors. – Dina El-Shenoufy, Chief Investment Officer, Flat6Labs

say they don’t necessarily want to take a risk; they just want to invest in something longer term, and there’s value in that too.” She concluded saying that the question that needs to be asked is, ‘What sort of investment are we thinking of ?’ Investing in venture capital is a completely different profile to real estate or t-bonds for sustainability. “To lump everything under a statement of ‘we need to have more investors’ really just throws a blanket onto the all of the nuances of the reasons and the decisions and the factors of having more female investors,” she said. Sweid added that women in the region tend to come across their wealth more fortuitously than men do— oftentimes it’s an inheritance or a gift of some sort, and because it’s unpredictable, they tend to be more conservative with how they then deploy it.

Source: Forbes; Boston Consulting Group and The Economist

“I also think that women view wealth as something that they want to preserve for their children rather than something that they want to grow, at least according to the small sample set I’ve met. What often strikes me is how women will invest excitedly if it means something to them, but men will invest on fundamentals,” she added. MAKING AN IMPACT That’s not to imply women investors don’t consider the fundamentals—they do. If it is a sector they care about, they will invest; if it’s an entrepreneur they relate to, they will invest. “On a personal level, I think if we feel it relates to a role that is important to society such as healthcare or education, then we are more likely to put our wealth and our money behind it. If we believe that the future of investing is impact

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QATAR

KINGDOM OF SAUDI ARABIA

New research commissioned by Jersey Finance in conjunction with Hubbis, and published at the launch of our new Dubai International Finance Centre (DIFC) office, confirms that succession planning remains the key challenge for HNWIs in the GCC, which offers a weighty prospect for the Gulf region’s wealth management industry and international finance centres (IFCs). Family wealth transition With an estimated US$1 trillion in assets expected to be transitioned between generations over the coming decade, this presents considerable opportunities for IFCs seeking to support families in the region by providing a full suite of cross-border, corporate, funds and wealth management services for HNWIs. Today, we are seeing a shift from using structured offshore solutions as part of the overall wealth management practices, to a more sophisticated approach. This is driven by key factors including concerns over regional stability, the expansion of global regulation, the gradual evolution of local jurisdictions towards developing global financial standards, and the pressure of planning for wealth succession and transition. In addition, and according to the research findings, the younger generation increasingly appreciates the importance of transparent wealth preservation, planning and the use of leading, compliant IFCs. Reasons to use IFCs Looking at clients’ sentiments, the use of jurisdictions such as Jersey is substantially driven by the geopolitical climate and fears of instability (25%) and succession planning (25%), followed by privacy and confidentiality (17%), asset protection (17%), tax efficiency (8%), and diversification of jurisdictions and assets (8%). These factors are driving clients’ initiatives towards global asset and wealth diversification, wealth structuring and an increasing use of premium centres like Jersey. International tax compliance The research pointed to an important shift taking shape with a heightened sense of awareness regarding tax compliance by GCC HNWIs.

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According to our research, 75% of clients know today whether they might have issues relating to transparency, tax and existing structures. Many of these clients fully accept the significant benefits offered by structures established in IFCs like Jersey that are leading the way with their compliance to international regulations. Forward-thinking IFCs are key According to our research findings, HNWI clients in the Middle East understand that the selection of an IFC is critical, with reputation being the most important factor. As such, there is a clear need that Jersey can meet head-on with its first-class reputation for wealth management expertise, regulatory robustness and transparency. Jersey Finance in the DIFC In this context, our presence in the DIFC presents a big opportunity as it boasts a dynamic and integrated business environment. Jersey has a long and solid history in the region and, amidst increasing local and global regulation and compliance requirements, has been successful at promoting its credibility as an IFC of excellence. As such, we are very proud to become the only IFC in the DIFC, a testament to our commitment to the region and a strong endorsement to the wealth creation dynamics here. Furthermore the DIFC enables Jersey firms to have a GCC domestic proposition in addition to the Jersey private wealth management solutions. For further information on Jersey’s world-leading IFC, contact either Cormac Sheedy or Richard Nunn, Jersey Finance Business Development Directors for the GCC: email: richard.nunn@jerseyfinance.je email: cormac.sheedy@jerseyfinance.je Read the ‘Wealth Structuring and the International Financial Centres: Perspectives from the GCC’ white paper at www.jerseyfinance.je/research.

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WEALTH ARABIA SUMMIT 2018

investing them women have a massive role to play, it’s just about positioning them in the right place,” said Sweid. Sweid clarified that most investing has some sort of impact, and highlighting that impact when pitching to a woman who could potentially invest often sparks interest a bit further than the dollar bottom line. Based on research she read, Sweid added that women are more likely to give up a small percentage of their return for that impact than a man would.

“That does resonate with me because if someone said, ‘Would you rather make 11 per cent on your money and impact X, Y, or Z, or 12 per cent and have no impact, in a space that I cared about, I would happily take that one per cent cut. I don’t know if a man would do the same thing.” Lucy Chow, Director, Women’s Angel Investor network (WAIN) said that as an investor she is often asked as an investor to give examples of successful entrepreneurs. Men are typically named.

We should start teaching younger generations to make sure that they have the basics—and I’m not talking about venture capital. They need to learn that little by little, by taking 20 per cent of their income, putting it into a fund, they can invest in a better future, a better retirement, and financial independence. We have to start from there. – Christiane Haber, CEO, FFA Private Bank

PHOTO CREDIT: Bloomberg/Jeenah Moon

“Let’s stop doing that. Let’s get out there are mention examples of female success stories in this region. We also need to use our spending power to uplift female founders, and we can do that via social media. If we love a company, we should be out there talking about it.” During the Q&A an audience member raises a question about gender in financial jobs and whether it was necessary to work in the financial

WEALTH ARABIA SUMMIT 2018

sector before attempting to embark on a role in the investment space, since women seem more prominent in the start-up scene. All the women on the panel come from a financial background. Chow, who had spent a long time with HSBC said having that background has value. “Frankly, [the investment world] is male dominated, so you need to feel comfortable in that space.”

WE DON’T NEED NO EDUCATION—OR DO WE? Haber noted that she recently spoke to women who had no idea about investment. She kept her talk very basic for these women, but was still shocked that these women didn’t even know the definition of a stock or bond. “We should start teaching younger generations to make sure that they have the basics—and I’m not talking about venture capital. They need to learn that little by little, by taking 20 per cent of their income, putting it into a fund, they can invest in a better future, a better retirement, and financial independence. We have to start from there,” said Haber. El-Shenoufy completely agreed, but again, wanted to take it a step back, saying that the numbers of men and women going to school are not that far off; the statistics vary hugely at college. “There’s just a different interest. The number of females that apply to engineering schools—the numbers that apply, not get accepted—is substantially lower than the numbers of males applying, and the case is similar for financial schools. There is a lack of interest. The reality is that there is far less interest by women into mathematics, finance, engineering and numbers. But the problem is not the number of investors, the problem is the number that want to be investors. Sweid agreed that financial education is starting too late and explained why social media was partly to blame. She taught a capstone course at one of the female universities here. “Inevitably more than half the questions I would get from these 21-year old women were around my husband, my kids and my work life balance. They weren’t about strategy, they weren’t about finding a job– it was a mindset issue and I think it’s gotten worse over the last five to 10 years because of social media. So, you get a job to get a job—you don’t get a job to build a career or create wealth. You get married to get the wealth that will take care of you for the rest of your life and your job is supposed to be something fun that you enjoy.”

She said that’s what women are being taught right now: that your job is nice to have; not a serious endeavour to build a career and wealth. Sweid saw this in students that were 21 and argued that trying to teach financial literacy at 17 or 18 is even too late because social media gets to young woman as young as 12. El-Shenoufy touched on the cultural element of leniency for women not to be financially savvy. “Parents are more inclined to say, ‘you don’t need to know that, but your brother does.’ But I was lucky to have a father who did not make that distinction, who was not lenient in that regard and maybe that’s how far back we need to go to see more women investors 20 years down the line. But we can fix it in the right target group starting now.” El-Shenoufy has carried the mindset of not being lenient on women into her approach to business and when having women pitching to her. “I’m not more lenient on females, and I think the only way to bring in better investors and entrepreneurs is not to be lenient.” Sweid agrees and was blunt in saying women entrepreneurs frankly need to do a lot more homework. The female entrepreneurs that pitch Global Ventures are not at the same calibre as the men in terms of knowing their numbers and knowing how to pitch. “I’m not harsher with them because they are women, I’m harsher because the quality of the pitch is not the same as the men. They should do more specifically in terms of knowing the numbers and not relying on the man they bring with them.” Chow added that in order to improve the numbers of women in the financial space, female investors could try to be more accessible to women entrepreneurs needing guidance, adding that forums like the WEALTH Arabia Summit certainly help. She added that when talking about encouraging the next generation of girls to invest, and invest in women, is to be vocal about the examples of women who have done well. The more examples of successful women entrepreneurs there are, the more will come up after them. wealtharabia.net

WEALTH ARABIA SUMMIT 2018

Uncertainty provides opportunity Murray Strang, Head of Dubai - Management and Mustafa Kheriba, Chief Operating Officer of Abu Dhabi Financial Group (ADFG) speak with WEALTH Arabia Summit Chairman William Mullally at the third edition of the forum about the latest developments in the real estate world

n uncertain times, is real estate still a good idea—and are the traditional markets that Middle East investors gravitate towards still the best options? Real estate investors from across the UAE gathered for one of the most active and popular sessions at the third WEALTH Arabia Summit to hear two of the region’s real estate titans—Murray Strang, Head of Dubai - Management and Mustafa Kheriba, Chief Operating Officer of Abu Dhabi Financial Group (ADFG)—talk about their perspective on the issues facing real estate investors. While Strang brought Cluttons’ renowned expertise that is regularly provided to investors across the Middle East, Kheriba brought the 32

(L-R): William Mullally, Editor, WEALTH Arabia; Murray Strang; Mustafa Kheriba

WEALTH ARABIA SUMMIT 2018

perspective of both an investor as well as a developer, with more of a stake in one traditional market for Middle East investors—London—perhaps than any other body. “Abu Dhabi Financial Group is an investment manager based out of Abu Dhabi that aggregately manages about $20 billion worth of assets. We’ve only been around for about eight years or so. In terms of real estate, our exposure is quite vast. We have the largest privately held REIT with properties across the United Arab Emirates, a real estate divsision that expands into London and the UK, where we are the largest developer of prime central residential. We have the most inventory coming into market over the next three to five years. wealtharabia.net

WEALTH ARABIA SUMMIT 2018

We also have real estate exposure to Eastern Europe, and we’re looking to expand everything we do when it comes to real estate. We also have a quasi-real estate lending arm that does real estate finance as well,” explained Kheriba. Is London still the only game in town for GCC investors? Strang says no. “Middle East clients definitely have an affinity towards London. It’s more of a historical loyalty than a long-term financial return decision, specifically 34

with uncertainty that comes with Brexit and other issues in the UK, but the wider UK markets are still very interesting to Middle East buyers. We are starting to see a move away from core central London that was historically doing very well and looking at more regional markets, including Manchester, Liverpool, Glasgow, Edinborough. The UK regional markets are now extremely popular, and over the last 12 months there is a lot of large scale,” said Strang.

While there is a lot of worried sentiment in conversations around London, Kheriba is confident it will continue to be a good investment. “60 per cent of our business is real estate, and out of that more than half is the UK. London will always be the centre of the economic world, no matter what happens. People talk about Brexit, and the effects of Brexit on real estate, and yes the market has softened, but it hasn’t softened to the degree of

WEALTH ARABIA SUMMIT 2018

Construction work in Dubai has increased ahead of Expo 2020, with new real estate debuting in the market.

Yes I agree that certain pockets of money are going outside to the periphery, but it’s still the main focus for the Middle East export of capital to real estate. Because we are possibly the largest developer of new building in London today, we see a lot of interest from across the globe. We see a lot of interest from Asia, Africa— it’s not just Europeans. The appetite is quite high,” said Kheriba. The type of real estate that investors are looking at in the UK is evolving. “What does the UK offer? A stable political system, a stable economic system more or less, a commonly and universally understood language, and it’s the centre between here and further west. What’s changing is the flight of capital from this region to Europe or North America in terms of what types of assets are in demand today. We’re looking at things like healthcare facilities, old age facilities, and more,” said Kheriba. Institutional investment and individual investment can without question affect the sort of investments that are made. Individual investors take much more into account than just pure risk and return, according to Strang. “There’s definitely a profile of asset that institutions will go after— something more solid, incomeproducing, and risk averse, with a tenyear exit plan. A family fund might be looking at something that could be a legacy for years to come,” said Strang.

Rarely is investment without risk— or without error. Investors in the GCC, however, are getting more savvy with their investments in the last five to ten years, Murray has noticed. “The lessons that our clients learn from making errors is being realistic about the pitfalls and costs of the investments that they take on. We’ve seen our clients in the Middle East in the last five to 10 years develop in terms of due dillgence and analysis through the roof. Whether that’s through mistakes or the learning process of the local market maturing, it’s now about looking about contingency plans for what may go wrong with investments, looking at not trying to save costs left right and center to maximise shortterm return, sinking funds into it to maintain long-term value, and the keeping the worst-case not as bad. It’s about looking at the long-term lifespan, rental voids, and building that into your plan from day one. We now see clients that look at that wider picture,” said Strang. THE LOCAL MARKET The uncertainty surrounding the UK has been the talk of the real estate world, but in Dubai, as prices have adjusted downwards in the last few years, some investors have expressed concern. Both Murray and Kheriba assured investors that Dubai remained a good choice.

PHOTO CREDIT: Bloomberg/Khushnum Bhandari

emerging markets, for example. The appetite is still there. Although it is at a high cycle, it’s got decent returns for the opportunity, risk-adjusted,” said Kheriba. High net worth individuals from across the globe—not just Middle East or Europe—are expressing interest in London real estate, according to Kheriba. “For us, we are still very bullish for the UK real estate market. wealtharabia.net

WEALTH ARABIA SUMMIT 2018

Mullally, Strang and Kheriba at the WEALTH Arabia Summit.

“The key reason is that supply is currently outplacing demand, and so tenants have a wider choice and have the ability to negotiate downwards on rentals, otherwise they can move to different properties that are being handovers at different rates. You’ll speak to other stakeholders that say this is negative for the market, and other that say it’s a necessary evil for the longer term. I’m a part of the latter group. We will see demand start to catch up with supply as supply slows. That’s always a factor in emerging markets, and we’re going through a critical period in Dubai,” said Strang. The story is much different now than in 2008, according to Kheriba. “In Dubai, when the cycle came to an abrupt end in 2008, its’ because the housing market was on a steep rise all the way into 2008, and then all of a sudden the global economic crisis hit and we saw a downturn. This is not the same time. Prices have been declining for three to four years, and they’re declining because they’re adjusting. Normal growth grates have been far exceeded, especially in the UAE. Real estate has traditionally been the go-to asset class for fortune building. Families that have made their wealth made it in real estate. It’s only in the last decades that we’ve seen technology bring mega-billionaires.” 36

“Everywhere in the world, real estate has been the staple. I don’t see this sector as something that you should be defensive on—on the contrary. This time and age is offering you an opportunity to acquire. In the UK, the decline of the pound is a massive opportunity for a US-dollar pegged currency resident to buy. Not to mention that the softening of the prices have given you an additional discount. What more could you want? Brexit is not going to make 10 million people close their offices and leave. It doesn’t work that way,” says Kheriba. With uncertainty always come new opportunities. “If you take a look at the 2017 influx of capital in real estate into Europe, London alone accounts for Paris, Madrid and two other major cities collectively. The appetite for London is still very Strang. In the city it’s primarily commercial— residential is not as expensive as those being built in Mayfair for example. We’re building in Victoria with a brand-new destination, and we’re selling at GBP 3000 a foot. If you’re telling me there’s no appetite, I have to beg to differ. We just sold a penthouse at GBP 5800 per square foot. Those types of assets will always have the collective attention of that kind of investment,” says Kheriba. In fact, it is the uncertainty that comes around both the UK and the UAE that may make this the right time to invest.

“Brexit provides opportunity, and I see Dubai the same way. If you look at recent trends, maybe people who bought certain assets in the last three to four years are seeing difficulty because asset values have come down, but if you actually look at the value and quality of real estate in Dubai given the last three to four years of hard time, there’s some fantastic value there. There’s family homes, there’s apartments, and there’s opportunities to get in and buy now at prices that are 30 to 40 per cent cheaper than they were four years ago. Are they suddenly going to be worth 10 per cent more in the next 12 months? Might it be five to six per cent less? Yes. But if you’re here with your family in six years, you’ll be looking back thinking, that was a really good time to buy,” says Strang. “As the adage goes, if everyone’s saying something is a good investment, it’s probably already too late,” added Mullally. Other markets have been in demand too, besides the traditional ones of Dubai and London. “Where certain markets start to fail, others see huge opportunity. Europe is continuing extremely well. We see huge Middle East demand for the Netherlands, Italy, Spain. There’s a lot of oppournity in Italy as it has struggled of late,” says Strang. While the real estate market faces uncertainty, there is no more uncertainty in real estate than there is in any other asset class—and in fact, if history is to show, real estate is generally a safe bet. “Global market conditions apply across the board. Though the US has been on a bull run, are equities a safe place to put your money? Not necessarily. We’re talking about interest rates hiking in terms of cost of money for borrowing across the board, and you’re still seeing a two and a half to three per cent premium on prime real estate as compared to bond yields. There are global economic challenges, but is real estate any more in danger than others? No. Brick and mortar is more predictable than other things such as cryptocurrencies,” says Strang.

PRIVATE BANKING

A vision for private banking Vipul Kapur, Head of Private Banking at Mashreq Bank speaks to WEALTH Arabia about his institution’s plan to become the country’s leading private wealth manager

PRIVATE BANKING

hat was the vision behind Mashreq Private Banking? Our vision is to be the UAE’s leading private wealth manager. Our unparalleled local experience and expertise enables us to meet the onshore wealth management, as well as lending requirements of our highand ultra-high-net-worth clients. How has that evolved over time? We have steadily grown over past few years. Most notably in the last year we have focused on investment in the capabilities of our client-facing talent, strengthening our back-office delivery and expanding our range of products and services. We believe that private banking is a tremendous opportunity and it will remain an area of significant focus and growth for us over the next few years.

What are your thoughts on the private banking landscape in the UAE? The private banking industry is undergoing an unprecedented period of transformation. Wealth creation and fund flows to the region continue to increase and the regulatory climate in the region is evolving to global standards and the region is one of the fastest growing globally in terms of fund flows and new capital for investment. We are ideally positioned to take advantage of the significant flow of capital that the region is attracting and are confident in our strategy to capitalise on the growth potential of the region. Our relationship mangers’ and wealth advisors’ expertise is being supplemented by transformational technologies that deliver better client engagement. This improves speed and efficiency and helps our clients make more informed investment decisions.

PHOTO CREDIT: Shutterstock/Katiekk

wealtharabia.net

PRIVATE BANKING

The UAE has been constantly evolving as a global center for wealth management and has become a magnet for high-net-worth individuals and their families who are making the country their home. Consequently, a significant part of their wealth follows them. We have positioned ourselves as the perfect partners to assist them with both local and international investment and lending solutions to manage their wealth. Furthermore, intergenerational wealth transfer is a reality and capturing those flows will be key to our success. However, dealing with the new generation is vastly different from the current owners of wealth assets, and banks have to evolve their products and delivery to suit these changing needs. The new generation of HNW and UHNW individuals are more informed and have strong views on participating in the decision-making process of their finances. Private banking teams will have to adapt to their needs and preferences. What are the key challenges facing private banking today? The UAE has been increasing its attractiveness as an onshore hub for private banking to compete with other more developed centers such as Switzerland and Singapore. As a result, Dubai is a very attractive proposition for private banks aiming to be present here. The industry faces a number of challenges, most notably in attracting and retaining talent to more effectively manage the wealth that is entering the country. A greater focus on innovation, specifically digitisation, is increasingly becoming more important as clients demand access to relevant information at the touch of a button. However, this digital revolution, data management, analytics and AI to deliver solutions to clients comes at a price and requires significant investment in terms of time, resources and money. The upside is that improvements to the quality of advice and the speed of execution, coupled with the ability to transform vast amounts of data into meaningful insight will better inform clientsâ&#x20AC;&#x2122; decision making. 40

Vipul Kapur, Head of Private Banking, Mashreq Bank

PRIVATE BANKING

This renewed focus on data engineering has seen FinTech companies partner with banks rather than compete with them, something, we believe, will accelerate the digital revolution. However, the pace of change does remain a challenge for regulators seeking to protect the interests of clients. While they are managing to keep up with the transformation, the added complexity increases their workload, particularly as new low-cost options like robo advisory require a new approach.

Understandably, a key area of focus is arming these individuals with the necessary skills to better utilise our advanced digital solutions.

Our clients are our best advocates and they continue to be our most important source of referrals of new clients.

What differentiates Mashreq from its competition in the private banking space? Mashreq has been serving clients for over 50 years and providing them with solutions across their banking, trade, financing, corporate and international requirements. We use our combined expertise and experience in all these divisions to offer clients a vast range

What is your key focus for 2019? We are optimistic about 2019 and are confident that the platform we have put in place and the investment and financing solutions we have introduced will deliverer the success our clients demand. The needs of HNW clients are becoming more sophisticated than ever, moving from transaction-based business to portfolio-based solutions, as more of these individuals move to the UAE and intergenerational wealth transfer becomes increasingly commonplace. Our focus will be to continue to provide them with the right approach and solutions to meet their individual objectives.

Our clients are our best advocates and they continue to be our most important source of referrals of new clients. â&#x20AC;&#x201C; Vipul Kapur

But, there is reason for optimismâ&#x20AC;&#x201D; the stock market remains strong, fund flows are favorable and wealth management continues to be one of the regionâ&#x20AC;&#x2122;s best-performing sectors. The UHNW client segment is expected to experience an annual growth of nine-10 per cent by assets under management over the next five years. In essence, businesses that can capitalise on this brave new world can expect to benefit in the medium- to long-term. How is Mashreq working to overcome those challenges? We have made significant investments in developing the skills of our relationship managers and our investment specialists to ensure they continue to provide innovative solutions across a range of products to suit the risk and return needs of our clients. Our team of investment advisors, FX & Structuring specialists are equipped to work with our clients to manage every aspect of their wealth management & lending needs.

of products and services. We are recognised market leaders in structured solutions, real estate financing, debt and equity products and trade solutions - assisting our clients in managing their personal wealth is in our DNA. Tell us about your clients. Our clients are looking to leverage opportunities in the region and are keen to participate in its growth. They typically have wealth distribution across several global centers and are therefore seeking to diversify their assets in the Middle East. They have both investment and protection needs and welcome our access to regional market opportunities. Like Mashreq, they are global in thought and local in execution. How do you plan to grow your clientele in the future? For us, client satisfaction is key to meeting our growth aspirations. Our investment in innovation is focused on achieving this goal and we are confident that our unique approach will reap dividends for both us and our clients.

What is your personal management style? I have been part of the wealth management industry for the past 28 years. I have been a relationship manager, as well as managed large private wealth businesses across UAE, Singapore & London. Private banking is a very personal business and works on trust and access. Our teams work 24/7 with our clients. I believe that there is no other business that lends itself to a perfect blend of personal touch and digital solutions that can so effectively enhance the client experience and deliver profitable results. To be an effective leader and get the best results, you have to have a broad range of styles and be able to use them appropriately based on the circumstances. I believe in collaborating with teams and looking for opportunities to share best practices that benefit our customers. I also believe that investment in the longterm development of employees is the best way to achieve sustainable results. wealtharabia.net

INVESTMENT

PHOTO CREDIT: Michael Nagle/Bloomberg

INVESTMENT

All eyes on trade in 2019 William Davies, Global Head of Equities, EMEA, Columbia Threadneedle Investments writes about the biggest macro issue on investorsâ&#x20AC;&#x2122; minds

here has been a significant de-rating of equities over what has been a disappointing 2018. Despite profit growth of more than 20 per cent in the US (and around 10 per cent elsewhere in the developed world), the US equity market has essentially been flat while other developed markets have broadly been off by about 10 per cent in US dollar terms.This has undone the strong performance we saw in 2017. Why? Fear of several things: a full-blown trade war; rising yields; a China slowdown; and heightened geopolitical risk, including localised issues such as the Italian budget standoff and Brexit. All of these factors have combined to destabilise markets and de-rate equities. If any or all these issues do come to fruition, it would throw doubt on our growth expectations for 2019-20, and that in turn might suggest we are at the end of the cycle, which would be entirely consistent with equities derating. But all of this leads us to the central question: what do we actually believe will happen in 2019? wealtharabia.net

INVESTMENT

TRADE Trade is key among our concerns and is woven through each of the others. If the current stand-off is resolved, so the wider outlook will appear more positive - and vice versa. The worstcase scenario is a continued ratcheting up and broadening of tariffs, and the markets are certainly discounting a reasonably ugly outcome. But will this occur? With such a volatile personality in the White House it is something of a fool’s errand to make predictions. However, President Trump has in the past suggested he would prefer no or low tariffs over higher tariffs, but his chosen means to get a satisfactory deal from a US point of view has been to threaten - and he has followed through with these threats in a very real way. However, just as we saw with the revamped North American Free Trade Agreement— an 11th-hour deal between the US, Mexico and Canada to create the USMCA when none looked likely—it remains eminently feasible there will be a similar resolution with China and other nations. We are mindful that the US presidential elections take place at the end of 2020, and Trump will not want to risk a sharp economic slowdown or recession going into the election cycle. This does not necessarily mean that Trump will need to resolve the trade stand-off immediately, but it perhaps requires him to ensure the situation does not escalate during 2019. Our base case is that the worstcase trade scenario is less likely and it is possible that there is a sudden path to resolution, but putting a timeframe on this is tough. INTEREST RATES US bond yields rose above three per cent this year and the fear here is that we will revisit further rises in 2019. The fiscal stimulus we saw passed in the US at the back end of 2017 and implemented this year - delivered at a point in the cycle when additional impetus is not required - would suggest yields may go higher. 44

Contributions of exports vs domestic demand to growth - a relatively closed us 2.5 2.0 1.5 1.0 0.5 0.0

UK Exports

Domestic demand incl. stocks

Source: European Commission, 2018.

This move ought to be inflationary, especially when coupled with US unemployment at a 49-year low, which could see higher wage demands and rising inflation (indeed, we are seeing evidence of rising wages in the US and Japan). However, all the other fear factors are working to slow things down, along with structural issues such as ageing demographics, technology and disruption, so yields have not moved in the way we might have expected. If there is a resolution to the trade issues, the prospect of stronger growth may lead us to be more concerned about slightly higher bond yields over the next 12 months, but if there is no resolution, it is fair to say we would not expect rates to move higher. CHINA AND EMERGING MARKETS The trade stand-off has caused a slowdown in parts of the Chinese consumer economy, but we are still seeing reasonably strong growth. There has been a degree of fiscal stimulus from the Chinese government, though it is aimed more at bolstering the

economy rather than turbo-boosting it. If the trade issues are resolved we might expect a period of Chinese tightening once again, or at least a reversal of the stimulus. However, if the stand-off continues we can expect an ongoing loosening to shore things up. But it is our belief that although having an impact, this is not significantly destabilising the global economy at this moment in time. Emerging markets especially have been negatively affected over the past year. Part of the reason for this is the strength of the US dollar, but this is arguably passing as the effect of Trump’s own fiscal stimulus rolls off, which will once again be supportive of broader emerging market equities as we move forward. GEOPOLITICS We are living through a period in which several countries have dominant or strong leaders - from Trump to Vladimir Putin and Xi Jinping, and even Shinzo Abe is showing more nationalistic tendencies. When you get strong leaders who threaten in order to

INVESTMENT

Market pricing for 2019 fed hikes - enough? 0.60 0.55 0.50 0.45 0.40 0.35 0.30 0.25 0.20

Mar 2018

Apr 2018

May 2018

Jun 2018

Jul 2018

Aug 2018

Sep 2018

Source: Macrobond, 2018.

achieve their aims, tensions inevitably rise, and it fits that there will be a higher equity risk premium as a result. Once again, though, if we see a resolution of trade issues it will likely release some of those tensions. But it remains entirely possible that other unforeseen issues will arise over the course of next year, and this might include anything from cyber security to disruptive elections, and would serve to further increase tensions between countries. In Europe, two issues in particular continue to bubble along and have the potential to destabilise markets, although not on the same scale as the global trade war. In Italy, the budget stand-off could escalate, though it would be needlessly so in our opinion as the margins over which Italy and the European Commission are arguing are slight. Brexit, meanwhile, is decision spaghetti. In other words, there are a whole number of different outcomes and how we might end up there. But in all honesty, this is not a global problem: it’s a European bump and a UK problem. But it can play out deleteriously on this local level.

Emerging markets especially have been negatively affected over the past year. Part of the reason for this is the strength of the US dollar, but this is arguably passing as the effect of Trump’s own fiscal stimulus rolls off, which will once again be supportive of broader emerging market equities as we move forward.

SUM OF ALL FEARS Taking all these factors together, the common theme we are looking at most keenly in 2019 is trade. We believe an improvement here would be a big positive for equity markets but, conversely, if trade deteriorates markets will deteriorate too and the global environment will weaken. Although our central case is that we are late cycle, we do not believe the end is nigh. We note there has been low growth in Europe and Japan this cycle, and although it has been a little higher in the US, we are loath to call a peak when there is a US election in 2020 and it is in the president’s interest to enter that election cycle during a period of US growth. If trade as an issue is managed in such a way that the worst-case scenario does not materialise - and it is certainly in the power of the world’s leaders to be able to bring about a solution - then the outlook for 2019 may be more benign, with positive returns in equity markets the result. THE LATEST UPDATES In early December, the US/China trade stand-off developed further. As we hypothesised, President Trump has sought to stop the worst-case trade scenario from developing by delaying for 90 days the imposition of increased trade tariffs from the start of 2019. The apparently constructive rapprochement between himself and President Xi Jinping will allow for further negotiations, but this is not a permanent solution. Rather, it is a short-term delay with the potential to offer up a long-term resolution if the leaders can agree (or be seen to agree) mutually beneficial terms. But with precious few details on who might give up what, it is not any easier to foresee what a resolution may look like, or when it might occur. However, this is undoubtedly a positive step, and helps open up the opportunity for an ultimately favourable resolution. wealtharabia.net

TRAVEL

The jewel of Basque country

PHOTO CREDIT: Shutterstock/Jon Chica

WEALTH Arabia ventures to Bilbao for some pintxos and found one of Spainâ&#x20AC;&#x2122;s best cities to visit

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TRAVEL

t’s been just over 20 years since Bilbao officially found its way into every major European travel guide—and it’s hard to say if that’s been a change for the better, or worse. It was 1997 that Frank Gehry, the famed architect, walked over the hill to see the museum he had designed finally built—the Guggenheim—and the first thought that entered his mind when he saw the architectural masterpiece was regret. ‘What have I done to these people?’ Gehry is quoted as having said, though a bit more rudely than we’re willing to quote here. With two decades separating that city-changing moment and the influx of tourists that it brought, the Guggenheim, as a piece of architecture, is still just as striking walking up to it, and although Gehry may have been worried that he created something too beautiful for a small hidden town in Basque country (which maintains its independent spirit), he may have overblown things a bit. The Bilbao Effect is still legendary, but Bilbao still maintains the charm that made it one of Europe’s best kept secrets, hidden in the heart of Basque country near the ocean. Since the opening of the Guggenheim, it had added other attractions as well—Game of Thrones, the HBO television show regularly cited as the most popular show in the world, filmed its Dragonstone beach scenes in San Juan de Gaztelugatxe, just a short ride from Bilbao. The location is just as stunning as it is on the show, though Bilbao itself as a city is perhaps more beautiful than its pictures suggest. It is the classic European city that others wish they still were but are too packed with tourists to really feel that way. The sort of cafes that are now overrun in Barcelona, for example, because Anthony Bourdain made a visit there once, are busy but without tourists in Bilbao. WEALTH Arabia decided, on our first day in Bilbao, to walk without maps, without a travel guide, to get a feel for the city—just getting lost and seeing where it takes us. It took us to Café Bar Bilbao, a tapas bar near Plaza Berria—built in 1821 and still a cultural hub, and the restaurant, though highly rated, is unlike its equivalents in other cities in Spain featured only locals, most who seemed

PHOTO CREDIT: CPI Financial/William Mullally

TRAVEL

The view from through the streets of Bilbao, Spain.

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Pintxos in Bilbao, Spain.

PHOTO CREDIT: Shutterstock/Alexandre Rotenberg

to know the owner, who ordered only with a simple gesture. Rather than look at a menu, we just waited for others to order and pointed—this worked out swimmingly. Sometimes when you don’t speak the language in a small European town, the best thing to pretend to do is act like you can’t speak at all. The tapas—or pintxos, more accurately—are the best thing you can find in Basque country, and are not to be missed. The bacalao al pil pil, made with salted cod in olive oil and garlic, which is fried until it becomes crispy, is delectable. This held true as we ventured from tapas bar to tapas bar, until we could no longer stay on our feet. Because we could not resist a bit more food, after a short break wandering the halls of the Guggenheim Museum, we made our way to Nerua, a Michelin-starred restaurant located within its walls. Run by Chef Josean Alija, it features a molecular gastronomic twist on the simple Basque ingredients—anchovies, duck and cod, for example—that really show that although Bilbao may no longer be the city that it was before its transformation, it will never forget its roots, and from those roots it will continue to grow into something divine.

PHOTO CREDIT: Shutterstock/klublu

TRAVEL

ADVERTORIAL

Real estate developer focuses on Abu Dhabi - one of the most attractive destinations for investment Luann Parker, Director, Business Development, IMKAN 52

vibrant economy, a stable government and a thriving pro-business environment are just a few of the reasons why interest in Abu Dhabi is soaring amongst the investor landscape. Positioned in the heart of the Middle East, and strategically centered at the crossroads of Europe, Asia and Africa, has enabled the city to become a hub for financial governance. Additionally, Abu Dhabi’s locale is pivotal to the China Belt and Road Initiative (BRI) with the pending addition of the Shanghai Stock Exchange to Abu Dhabi Global Markets (ADGM). The Emirate’s geographic location is not the only point of interest among key investors. The capital also holds the world’s second largest Sovereign Wealth Fund and has a solid economic footing with 60 per cent of the GDP for the entire UAE. Complementing its attractive monetary offer, Abu Dhabi has also positioned itself as the cultural center of the UAE, delivering the aweinspiring Louvre which is to be joined by The Guggenheim and Sheikh ,ayed Museums. Other thriving sectors include leisure; featuring the opening of Warner Bros World Abu Dhabi earlier this year; as well as advanced education led by NYU, John Hopkins, INSEAD, and Sorbonne; and healthcare with world class multispecialty hospital: Cleveland Clinic. wealtharabia.net

ADVERTORIAL

The capital is executing its longterm plan for the transformation of its economy through the Abu Dhabi Economic Vision 2030 Plan, which outlines a strategy for reduced reliance on the oil sector as a source of economic activity over time and a greater focus on knowledge-based industries in the future. This plan is structured around economic diversification in eight key sectors: cultural tourism, aviation, manufacturing, media, health care, petrochemical, financial services and renewable energy. By increasing investment in these sectors, the emirate is hoping to reduce its hydrocarbon sector’s contribution to GDP to 20 per cent by 2021, down from 59 per cent in 2005 and around 50 per cent in 2014. Mirroring the goals set for Vision 2030, the government launched a stimulus package, Ghadan 21 (Tomorrow 2021) earlier this year in September. Worth AED 50 billion across four pillars, 10 themes, and 60 initiatives; this plan details the strategy for the growth of Abu Dhabi’s future economy, which will provide attractive private sector jobs for both expats and UAE nationals. Received favorably by the business community, both real estate and construction industries, now have greater confidence and renewed commitment to private sector development. In this regard, Abu Dhabi Investment Office (ADIO) is formulating Public Private Partnerships (PPP’s) in support of Ghadan 21’s initiatives. As an Abu Dhabi-based developer, IMKAN has partnered with ADIO to lay the groundwork and create leading examples within its developments to bolster the capital’s vision. Our CEO Walid El Hindi, explains “With research at our core, we design and develop unique projects using disruptive technologies to produce soulful communities that will truly enrich the lives of its residents and visitors. IMKAN’s proposition is built around a unique research platform that uncovers the distinct social behaviors and habits of specific market segments, from millennials to discerning high net-worth individuals to formulate tailored user profiles. 54

Views from some of IMKAN's developments in Abu Dhabi.

The capital is executing its long-term plan for the transformation of its economy through the Abu Dhabi Economic Vision 2030 Plan, which outlines a strategy for reduced reliance on the oil sector as a source of economic activity over time and a greater focus on knowledge-based industries in the future.

This research-led approach enables us to shape communities that are in tune with the mind-set of each profile. Our mission at IMKAN is to create soulful places that enrich people’s lives.” By using a unique approach to community-building, we are currently developing an array of diverse mixeduse communities in Abu Dhabi: Makers District, Nudra, Shaikha Fatima Park and AlJurf to name a few. Our AED 7.4 Billion cultural flagship development, Makers District on Reem Island, was the result of extensive research that uncovered the need for a creative hub to complement our culture-based economy. This integrated community and creative ecosystem is anchored by The-Artery, an exemplar hybrid events and parking garage capable of accommodating a wide range of uses and home to many of which will be “Makers“- artists, curators, entrepreneurs, who make and create. Pixel, is the first mixeduse residential development that mirrors the identity of Makers District by bringing further innovative community living to Abu Dhabi.

We have set in motion a landscape of soulful developments that will cement Abu Dhabi’s footing as the cultural capital of the UAE, as well as provide an admirable model for placemaking amongst the regional development community. Sheikha Fatima Park, Abu Dhabi’s first open-air urban, leisure and entertainment park located in Khalidiya district, will offer a human friendly walkable environment that encourages active wellness and increased neighborhood property values. AlJurf, is our AED 15 billion integrated development, strategically located between Abu Dhabi and Dubai and spans 370 acres. This pristine coastal destination combines culture, nature, living and leisure providing diverse offerings to any property investor or second home buyer. Nudra, an exclusive community with

private beach access, boasts villas to be curated by its residents’ own designs unique to their style, personality and individuality. These projects are robust exercises in place-making; which as a concept has proven to result in higher asset returns on a global scale. Furthermore, our developments will provide strong investment opportunities in Abu Dhabi which has historically offered attractive yields of seven per cent; thus representing a strong value proposition relative to other developed markets globally. We have set in motion a landscape of soulful developments that will cement Abu Dhabi’s footing as the cultural capital of the UAE, as well as provide an admirable model for place-making amongst the regional development community. We’re focused and invested in solidifying Abu Dhabi’s economic positioning and quality of life as seen through Ipsos City Index, ranking the capital of the UAE second after New York as the ‘best business city in the world to live in’. Join us on this journey and be a part of this story! wealtharabia.net

CELEBRITY INTERVIEW

Moayad Alnefaie

Vipul Kapur, Head of Private

CELEBRITY INTERVIEW

Saudi Arabia’s global comedy star Jeddah’s own Moayad Alnefaie catches up with WEALTH Arabia ahead of his Comedians of the World special launches on Netflix

hat’s the best advice you’ve ever received? Whoa. The best advice ever? Ok, I can tell you that. I think the best advice I’ve received is to be positive, and stay positive. I work by that. I do stay positive. Even in the worst days, it’s a good day. There’s this guy from Sudan who when I ask him how are you doing today, he says, I’m in traffic of blessings—I don’t know what to thank God about or for. It sounds better in Arabic. wealtharabia.net

CELEBRITY INTERVIEW

What’s your favourite car? I don’t have a favourite car. I think cars are just metal.

I want to see the whole region. Everybody is doing it, but I’m not focused on a certain country.

What’s your to travel? Barcelona.

What was it like doing comedy in Jeddah? I started with a bunch of guys who have a company that posts shows on YouTube. They started about five years ago. I think there was a cultural movement in Saudi Arabia five or six years ago on YouTube, and people started producing shows and putting content. It was a friendship thing first and foremost, and comedy allows you to reach out, know people, and link up.

favourite

place

What’s your favourite restaurant? Any restaurant in Barcelona. I’m just picking the easy ways out. I noticed. Can I change my answer? I think my best food is my mom’s food. Put this in the interview so she can be happy with me. What do you want to see more of from the comedy world in the region? I want to see more! I want to see more Arabic comedy—that’s it!

Jeddah. Saudi Arabia, where Alnefaie was born and raised.

How has your career developed since you started expanding abroad? I started doing shows for Arabs and Middle Easterners. I travelled a lot around the world, but mainly the audience were Middle Easterners and Arabs.

I did shows all around. I started going to Kuwait after my first stand up, then I went to Dubai, then to Abu Dhabi, then the United States, then London. It’s a blessing. I did big shows—I did a show with 4,000 in DC. I did another in Kuwait that was around 4,000. It’s just like I told you though—it’s for Middle Easterners and Arabs. What do you hope comes of having your comedy on the global stage? I don’t overthink like that—that’s just going to make me really stressed. I think good is going to come out of this. Either to comedy, the region, the comedians, the audience—I just hope everybody has fun. If I can influence somebody or push somebody to do something, then that’s the best thing that anybody can wish for out of this experience.

PHOTO CREDIT: Shutterstock/Osama Ahmed Mansour

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MOTORING

MERCEDES AMG GT FOURDOOR COUPE: PERFORMANCE MEETS DESIGN A first look at the model debuting in the Middle East in 2019

ercedes-Benz Cars Middle East (MBCME) launched its flagship model, the allnew Mercedes-AMG GT four-Door CoupÃ©, in the region at an exclusive event at the brand-new Jumeirah at Saadiyat Island Resort, Abu Dhabi, on Thursday night, 22 November. The first four-door sports supercar with an AMG badge delivers driving

MOTORING

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MOTORING

experiences in new dimensions and is an extension of the AMG GT family to offer more space and power. It combines unique design, high comfort and outstanding sports car engineering with an athletic, four-door fastback layout. “The new AMG GT four-Door Coupé blends the impressive racetrack

dynamism of our two-door sports car with maximum suitability for everyday use. It has a unique way of embodying our brand core, “Driving Performance” and with its systematic configuration it will attract new customers for Mercedes-AMG”, said Tobias Moers, CEO of Mercedes-AMG GmbH.

The new four-door coupe, from every angle.

The output of the AMG 4.0-litre V8 biturbo engine has been enhanced further for the new MercedesAMG GT 63 S 4MATIC+. It delivers 470 kW (639 hp) and a maximum torque of 900 Nm, which is available over a wide engine speed range from 2500 to 4500 rpm.

MOTORING

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MOTORING

Mercedes-AMG GT 63 S 4MATIC+

Mercedes-AMG GT 63 4MATIC+

Engine

4.0-litre V8 with direct injection and twin turbochargers

Displacement

3982 cc

Output

470 kW (639 hp) at =5500-6500 rpm

430 kW (585 hp) at 5500-6500 rpm

Peak torque

900 Nm at 2500-4500 rpm

800 Nm at 2350-5000 rpm

Drive system

AMG Performance 4MATIC+ permanent allwheel drive with variable torque split and drift mode

AMG Performance 4MATIC+ permanent all-wheel drive with variable torque split

Transmission

AMG SPEEDSHIFT MCT 9G

Fuel consumption combined

11.2 l/100 km*

11.2–11.0 l/100 km*

CO2 emissions - combined

256 g/km*

256–252 g/km*

Efficiency class

Weight (DIN/EC)

2045 kg**/ 2120 kg***

2025 kg**/ 2100 kg***

Acceleration 0-100 km/h

3.2 s

3.4 s

Top speed

315 km/h

310 km/h

combined combined

Mercedes-AMG GT 53 4MATIC+ Engine

3.0-litre 6-cylinder in-line engine with exhaust gas turbocharger and electric auxiliary compressor

Displacement

2999 cc

Output

320 kW (435 hp) at 6100 rpm

Add. output with EQ Boost

16 kW (22 hp)

Peak torque

520 Nm at 1800-5800 rpm

Add. torque with EQ Boost

250 Nm

Drive system

AMG Performance 4MATIC+ all-wheel drive with fully variable torque distribution

Transmission

AMG SPEEDSHIFT TCT 9G

Fuel consumption combined

9.4–9.1 l/100 km*

CO2 emissions - combined

215–209 g/km*

Efficiency class

Weight (DIN/EC)

1970 kg** / 2045 kg***

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MOTORING

The Mercedes-AMG GT fourDoor Coupe’s design and dominant front and muscular body emphasise its sporty AMG genes, with the model delivering a top speed of up to 315 km/h and acceleration from 0 to 100 km/h in 3.2 seconds. The Mercedes-AMG GT fourDoor Coupe presents an impressive figure on the road, staying true to the brand’s identity to create a true driver’s car. Its tech-laden interior also allows for an interactive drive with a fully digital cockpit ensuring a smart driving experience. By combining the pure dynamism of the AMG GT two-door sports car with the practicality of everyday use, the new AMG GT four-Door Coupé follows the design philosophy

of Sensual Purity and embodies emotion, intelligence and pure driving performance. “The new AMG GT four-Door Coupé is the ultimate four-door sports car and the ideal ambassador for Performance Luxury”, said Gorden Wagener, Chief Design Officer Daimler AG. “It embodies a symbiosis of emotion and intelligence with breathtaking proportions and a puristic, surfaceoriented design with sensuous shapes. It is both hot and cool at the same time.” The Mercedes-AMG GT fourDoor Coupé at a glance. The Mercedes-AMG GT fourDoor V8 variants will be available in the Middle East region in Q4 2018 and the six-cyl variants are expected in the region by Q1 2019.

MOTORING

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PRODUCTS

(PHOTO CREDIT: Mastermind1/Shutterstock)

PRODUCTS

THE BIRTH OF THE MIDDLE EAST WATCH-COLLECTING COMMUNITY Sam Hines, Worldwide Head of Watches for Sotheby’s, traces the evolution

n late November, Sotheby’s held its first-ever watch auction in the Middle East, with the total value of the auction reaching $2.6 million. How this happened is a long time coming, but maybe not as long as you think. It was ten years ago that watch collectors in the UAE, after making a community online, started meeting up to compare collections— and it is from there that watch collecting started to truly transform. What were the first communities? According to Sam Hines, Worldwide Head of Watches for Sotheby’s, it was the fans of Panerai. “It first started in about 2006-7 with the Panerai groups, which used to call themselves Paneristis. That was where we first started to see these clubs form. In Indonesia we saw it first, then around the same time in the UAE,” says Hines. “Panerai were a lot like vintage Rolex where there are a lot of various limited editions, and it was a very online community. “The Panerai guys would meet in restaurants and compete over who had the most rare. Some were 10 pieces, others were 100 pieces.”

Sam Hines during Sotheby's Dubai Inaugural Watch Auction

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PRODUCTS

It’s not just the UAE—these groups have popped up all over. “In Indonesia there’s a group called the Vintage Rolex Society, made up of 100-150 watch geeks who buy vintage Rolex, and once a year we all meet in Bali who take four or five watches from their collection, compare watches, and talk about watches,” Hines says. Things today are different. In fact, even Panerai does not have the same allure that it once did. “The problem with Panerai is that they continued to make more and more limited editions. If everything is limited, then it doesn’t work the same,” says Hines. There’s always going to be value in Panerai, it’s just not what it was. We had an auction in Hong Kong this fall and the Panerais didn’t sell well at all. I think fashion comes and goes, and today Panerai is not as fashionable as it used to be. What we say to collectors when buying is, always do your own research to see what things are selling for in the market. They’re still great watches, they just aren’t as impactful as they used to be,” says Hines. Brands such as Rolex and Richard Mille have overtaken Panerai because they don’t try to cater to the collector, the same according to Hines. “Richard Mille is the master of marketing. When Nadal wins Wimbledon, he holds up the trophy, and on his wrist he’s wearing the RM 027 Tourbillion—the best marketing they could have. The watches are very comfortable and extremely well made, and they only make around 4,000 watches per year, whereas Rolex are making 800,000 and Patek Philippe are making around 60,000,” says Hines. According to Hines, the future of watch collecting is limited production. “That’s why are a lot of independent brands are up and coming today. Philippe Dufour, Roger Smith, FP Journe—these brands are making around 15 to 20 watches a year,” says Hines. “Collectors today are looking for value. They want to be involved in production, going to pay an expensive price for a watch; they want to see it as 70

It first started in about 2006-7 with the Panerai groups, which used to call themselves Paneristis. That was where we first started to see these clubs form. In Indonesia we saw it first, then around the same time in the UAE. Sam Hines, Worldwide Head of Watches for Sotheby’s

an investment. There are certain brands where you’d pay $100,000 retail, but the secondary market is $40,000.” In the past, this didn’t seem to matter to watch collectors. “It’s very different to what it was 15 years ago, where you just bought an expensive watch off the rack in a shop—collectors are looking for a lot more value and interaction with the brand. That comes with the knowledge that is with collectors today versus 15 years ago,” says Hines. At the November sale in Dubai, the auction attracted participants from 25

different countries across the world, and 25 per cent of these participants were new to Sotheby’s. Independent watchmakers were the stars of that auction as well, as Hines predicted. The sale was led by the designs of Richard Mille and MB&F. Three watches by Mille sold, led by a RM004 Felipe Massa which made $162,000. This titanium semiskeletonised split-seconds chronograph, equipped with the caliber RM004-V2 was especially designed for the intensive environments of Formula 1 racing ($110,000 - 170,000).

PRODUCTS

Katia Nounou Boueiz, Head of Sothebyâ&#x20AC;&#x2122;s Dubai wealtharabia.net

PRODUCTS

Ashkan Baghestani, Sothebyâ&#x20AC;&#x2122;s Contemporary Arab and Iranian Art Specialist and Head of Sale

PRODUCTS

The ‘Horological Machines’ from the Swiss brand MB&F (Maximilian Busser and Friends), turn traditional watchmaking of the highest craftsmanship into futuristic, fiercely unconventional timekeeping machine. Inspired by the 1980s Japanese cartoon Captain Future, The HM6 limited edition in pink gold, circa 2016 made $162,500 (est. $100,000-200,000). Among the other most valuable lots offered was Chopard’s L.U.C Tourbillon which realised $218,750.

It’s very different to what it was 15 years ago, where you just bought an expensive watch off the rack in a shop—collectors are looking for a lot more value and interaction with the brand. That comes with the knowledge that is with collectors today versus 15 years ago. Sam Hines, Worldwide Head of Watches for Sotheby’s

This is a very rare limited edition white gold, diamond and sapphireset tourbillon wristwatch with power reserve indication, circa 2007. The L.U.C. 4T calibre is unmatched for its reliability and precision. The tourbillon carriage of this watch is made of 62 parts and its balance oscillates at a rate of 28’800 vibration per hour. (est. $ 150,000-250,000). This will not be the end of Sotheby’s watch auctions in the Middle East surely—and the auctions will evolve as styles do. “What we’re seeing is that watches are being made in much smaller cases—that’s because people are more conservative today than they used to be in style. For years white metal was the most popular but we’re seeing more yellow gold watches today. All the time there’s an increasing desire to have the best quality, the rarest pieces in the best condition,” says Hines. “For vintage watches, condition is paramount more than anything. Brands that make watches just for profit are not going to be as popular in the future. Collectors themselves are much more discerning.” “A lot of people say what about the apple watch? Technology? If anything, collectors just want to own more and engage more because of technology. A lot of guys wear an apple watch on one wrist and a vintage watch on the other. Hines himself got involved in watch collecting through an entry-level job at Sotheby’s 20 years ago. From there, he fell in love, and became one of the world’s foremost experts. “It was by accident. I started as the administrator in watches, which is a junior position working on paperwork, and became hooked. I didn’t know much about watches when I started 20 years ago, but I became fascinated by these tiny objects that can be technical and mechanical, but if you look through the production, how they’ve changed with society, and a lot of the shapes and the cases reflect the buildings at the time. You’re always learning—this covers over 400 years of history. It fascinated me that collectors would pay huge sums for them,” says Hines. wealtharabia.net

PRODUCTS

PHOTO CREDIT: CPI Financial/William Mullally

PRODUCTS

A LUNAR COMPLICATION WEALTH Arabia reviews the Concord Impresario Gent Moonphase

n the 1970s and 1980s, everyone knew Concord. Though the brand was founded in Switzerland at the turn of the 20th century, it was in these years that the brand thrived at the top of the heap. But after a rebranding, Concord disappeared off of shelves and left the minds of the watch collecting world, who at the time were less savvy and more obsessed with what is new than what is timeless. The story does not end there, however. Concord in 2018 is making some of the best watches in its history of various styles. WEALTH Arabia got its hands on one of the latest models, one that is both subtle and sophisticated enough for your best suit, yet elegant and intriguing enough for any occasion. It’s called the Impresario Gent Moonphase, a fascinating new model that speaks the same design language as its predecessors and features a stunning new function which, like the Impresario

itself, represents a fascination with the history of timekeeping that is framed in a more contemporary context. Though the Impresario collection’s trademark is its traditional style, it is the ways in which they have played with that form that caught our eye, and has kept this watch on our wrist since we first acquired one. Let’s start where your eye will be most drawn towards: the 2018 addition, a complication to the Impresario Collection that unmistakably represents this blend of historical fascination and cutting-edge design: the moon phase display. On the blue dial of the Impresario Gent Moonphase, the moon and stars are set against a midnight blue background in a moon phase display that is positioned between the center of the dial and six o’clock, while two counters at three and nine o’clock show the day of the week and the date and month respectively. wealtharabia.net

PRODUCTS

This model is housed in a 40 mm stainless steel case with a fluted bezel, the new signature feature of the Impresario Gent. There are two variants: One worn on a stainless steel bracelet and another with a brown alligator leather strap. The dial is protected by a sapphire crystal with antireflective treatment, while the watch is water-resistant to 50m. The Impresario Gent Moonphase is our favorite Concord watch that we’ve tried, and has become a must add for our collection. MOVEMENT Calibre Quartz Ronda 10 1/2’’’ 706 (MGI Z9) FUNCTIONS Hours - Minutes - Seconds day/date/month indicators Hands for Hours - Minutes and Seconds – Date & Day on counters / Moon phase CASE Specifics / Material: Stainless steel case Diameter: 40 mm Thickness: 8.87 mm Glass / Crystal: Sapphire crystal with anti-reflective treatment Crown: Stainless steel crown Case-Back: Stainless steel Water Resistance: 50 meters DIAL Specifics / Material: Blue Dial Indexes: Rhodium plated Arabic numerals & indexes Hands: Hour & Minute: Alpha, Rhodium plated / Second: Rhodium plated with gold tip

The blue dialled model.

BRACELET Specifics / Material: Stainless steel bracelet Buckle / Clasp: Stainless steel spring deployment buckle with pushers

WEALTH ARABIA

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EVENTS

The WEALTH Arabia Summit will return in 2019

calendar, and an excellent chance for you to interact with your peers in the investment world. The WEALTH Arabia Summit was begun with the idea to be a candid platform for the worldâ&#x20AC;&#x2122;s greatest investment minds from every sector to share their knowledge and debate the future. We promise that the fourth edition of the Summit will be its best yet. See you all in 2019!

PHOTO CREDIT: CPI Financial/Florante Magsakay

fter a successful event that brought together people from across the retail investment landscape to discuss the dayâ&#x20AC;&#x2122;s most pressing issues in a substantive and actionable manner, we are pleased to announce the next edition of the WEALTH Arabia Summit, coming in the last quarter of 2019. Once again, we will continue to grow and evolve, making sure that the Summit remains a vital part of your

The WEALTH Arabia Summit 2018

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