#34 - January 2016

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

The emerging wealth paradigm REZA DARI CEO GLOBAL INVESTMENT BANK

A BOLLYWOOD LEGEND IN CONVERSATION WITH ANIL KAPOOR 34

CLASSIC MOTORING A TRABANT TOUR THROUGH HUNGARY 36

THE NEXT MEGATREND TIME TO INVEST IN ROBOTICS? 22

Be Be secure. secure.

Be Be first. first.

Wealth Wealthis isthe thepower powertotomake makethings thingshappen. happen.AtAtFGB, FGB,we weare arecommitted committedtototurning turningyour your goals goalsinto intoreality. reality.Through Throughour ourexpertise expertiseand andinvestment investmentstrategies strategieswe wefocus focusononprotecting protecting and andgrowing growingyour yourwealth, wealth,sosothat thatthe thefuture futureis isa apromise promiseofoffreedom freedomforforyou. you.

Global Global Wealth Wealth Management Management - Business - Business Banking Banking - Personal - Personal Banking Banking Solutions Solutions Transaction Transaction Banking Banking - Financing - Financing - Advisory - Advisory - Global - Global Markets Markets - Islamic - Islamic Solutions Solutions UAE UAE - QATAR - QATAR - INDIA - INDIA - SINGAPORE - SINGAPORE - HONG - HONG KONG KONG - SOUTH - SOUTH KOREA KOREA - UNITED - UNITED KINGDOM KINGDOM - LIBYA - LIBYA www.fgbwealth.ae www.fgbwealth.ae

Awarded Awarded the the Best Best Premium Premium Banking Banking Service Service (Wealth (Wealth Management) Management) byby Banker Banker Middle Middle East East - 2014 - 2014

bleed bleed guide.indd guide.indd1 1 p03-04_Contents.indd 2

02/04/2015 02/04/2015 08:50 08:50 31/01/2016 15:19 2/8/16 5:21 PM

CONTENTS

Editor's

LETTER Greetings, all Welcome to the 34th issue of WEALTH Arabia. I hope you enjoy what is certainly our finest issue yet.

We’re always looking to bring you ever more actionable investment information to assist with your portfolio. This issue, we have a few things to shine a spotlight on. First, our cover story looks into the work that Global Investment Bank is doing with Project High Dominion and its International Film Fund. I’m so excited to see the project unfold, but investors should take note and get involved now before things kick off, as CEO Reza Dari makes an excellent case for making it a part of your diversified portfolio.

Everywhere, people are rolling out their yoga mats, changing their eating habits, and changing their whole lifestyle in order to get healthier. With more and more stories coming out every month, it’s become very clear that the way to a better life is through health and wellness. But as the world stops spending its money on burgers and starts spending them on organic quinoa, where will the growth be?

Go to page 19 to find out, and be sure to talk to your portfolio manager soon.

Every issue, we take a look at the best of the best in the top tier of the motoring world. This issue, we’re trying something a bit different—looking at the legendary Trabant through a tour around Hungary. Though it may not have all the luxuries of a Rolls Royce, it’s a weekend away from our Wraith that will surely put a smile on your face.

Till next time,

William Mullally

2015 15 08:50 201608:50 15:19 p03-04_Contents.indd 3

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

08

OPINION

06

Has your relationship

manager called recently?

NEWS & ANALYSIS

08

Industry experts weigh in on recent developments

INVESTMENT

10 12

‘Well’ positioned for 2016: ADS Securities Finding the right strategy for 2016

COVER INTEVIEW

14

The emerging wealth paradigm: Global Investment Bank

PRIVATE BANKING

19

14

Investing in the wellness craze

WEALTH MANAGEMENT

22 25

Anticipating the next megatrend

24

A Swiss bank in your pocket: Swissquote

PROPERTY

28

Will systems for all: DIFC Wills & Probate Registry

PRIORITY BANKING

30

Islamic banking for the HNWI: Noor Bank

34 ISSUE THIRTY FOUR - JANUARY - MARCH 2016

3

2/18/16 12:22 PM

CONTENTS

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

36

GOOD TALK

34

Sitting down with Anil Kapoor

MOTORING

36

Classic motoring, Soviet style

HOTELS & RESORTS

40

Charting growth and preserving heritage: Katara Hospitality

40

LUXURY PRODUCTS

48 50

ADVERTISING sales@cpifinancial.net

Managing Editor GEORGINA ENZER georgina@cpifinancial.net Tel: +971 4 391 3728

Business Development Manager WEALTH Arabia DANIEL BATEMAN daniel@cpifinancial.net Tel: +971 4 3752526

Editor, WEALTH Arabia WILLIAM MULLALLY William@cpifinancial.net Tel: +971 4 391 3718 EDITORS SARAH OWERMOHLE sarah@cpifinancial.net Tel: +971 4 375 2527

Chief Designer BUENAVENTURA R. JALUAG, JR. jun@cpifinancial.net

AVIATION Luxury air travel, anywhere, anytime: Royal Jet

EDITORIAL editorial@cpifinancial.net

Contributors Nicholas Ashhill, Ashish Marwah, Pictet Asset Management, Tom Paye, Fabiano Vallesi

From dust to decadence: Scott Dunn

45

Chief Executive Officer ROBIN AMLÔT robin@cpifinancial.net Tel: +971 4 391 3723

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

LUXURY TRAVEL

42

Chairman SALEH AL AKRABI

42

Senior Designer FLORANTE MAGSAKAY florante@cpifinancial.net Creative Designer ANA MAKSIĆ ana@cpifinancial.net Online Editor MATT AMLÔT matt@cpifinancial.net Tel: +971 4 391 3716

Luxury without guilt

Sales Director JON DESPRES jon@cpifinancial.net Tel: +971 4 433 5321 Sales Director OMER HUSSAIN omer@cpifinancial.net Tel: +971 4 391 5419 Business Development Managers NIKHIL MATHUR nikhil@cpifinancial.net Tel: +971 4 391 3717 MOHAMED MAKSOUD mohamed@cpifinancial.net Tel: +971 4 391 5320 LIAM O’CONNOR liam@cpifinancial.net Tel: +971 4 391 4680 Head of Contract Publishing & Business Development VINOD THANGOOR vinod@cpifinancial.net +971 4 391 3725 London Bureau ISLA MACFARLANE isla@cpifinancial.net Tel: +44 7857 429476

Online Content Manager Finance Manager SIYA PAINAYIL UMAIR AHMED KHAN siya@cpifinancial.net ACA Tel: +971 4 391 3722 umair@cpifinancial.net Tel: +971 4 391 3727

HNWI CHAT Sitting down with a HNWI

Data Analyst NADINE ABOUZEID nadine@cpifinancial.net Administration & Subscriptions enquiries@cpifinancial.net Tel: +971 4 391 4682 Tel: +971 4 391 3709

A look back at some recent news ISSUE THIRTY FOUR - JANUARY - MARCH 2016

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

Head Office P.O. Box 502491, Dubai Media City Dubai, UAE Fax: +971 4 390 9756

THE EMERGING WEALTH PARADIGM

The emerging wealth paradigm

WEALTH WARNING!

REZA DARI CEO GLOBAL INVESTMENT BANK

A CPI Financial Publication

A BOLLYWOOD LEGEND IN CONVERSATION WITH ANIL KAPOOR 34

CLASSIC MOTORING A TRABANT TOUR THROUGH HUNGARY 36

THE NEXT MEGATREND TIME TO INVEST IN ROBOTICS? 22

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.

4

p03-04_Contents.indd 4

www.cpifinancial.net Registered at the Dubai Media City Printed by United Printing & Publishing – Abu Dhabi, UAE © 2016 CPI Financial FZ LLC 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 Managing Editor.

WWW.WEALTHARABIA.NET

2/17/16 12:01 PM

7

51201

Snapp Finance ME Trim 21x27cmai.ai

7

51201

1

2/15/16

7:40 PM

14521607

p03-04_Contents.indd 5

2/17/16 10:34 AM

OPINION

HAS YOUR RELATIONSHIP MANAGER CALLED

RECENTLY? A

fter getting good news in the region for years as the Middle East rebuilt itself following the 2008 financial crisis, the new normal for oil prices, which are currently hovering around $35 a barrel, has finally begun to hit the GCC in earnest. In late January, Etihad Rail, a national project in the UAE, suspended its Stage Two, which would have connected by rail Abu Dhabi’s Western Region with the rest of Abu Dhabi, Dubai as well as the borders of Saudi Arabia and Oman. Saudi Arabia announced at the end of 2015 that it would be cutting its budget as well. These are just two examples, as the effects are being felt far and wide, and those ripples will continue to be felt for the foreseeable future.

It is not time to play Chicken Little and think that the time of prosperity it as its end, as there are still many success stories to be found in the region. This does mean that some HNWIs out there may be feeling the effects of the recent

6

p06-07_opinion.indd 6

WWW.WEALTHARABIA.NET

volatility. But where does this place your relationship with your bank?

In hard times, an HNWI’s relationship with their bank becomes more important than ever. High-level banking is often touted as being integral with the personal relationships built between the individuals and the bank via its relationship managers.

And as I’ve spoken to those placed highly at banks throughout the region, it is the volatility ahead that the best banks are preparing for with their customers.

“When times are tough, and people are a little bit nervous, that is the time when we need to be a little bit more proactive,” Ishrat M. Kiyani, regional head of Mashreq Gold told me recently. A clear, long-term strategy needs to be put in place, and a regular dialogue needs to assure both sides that everything is being kept on track. If your relationship manager is not on the phone with you even more often during the recent volatility than he or she was during the boom times, it may be time to look at reviewing that relationship.

William Mullally

A r m

HEAD

bleed guide.

2/17/16 10:53 AM

Some bonds are too strong to break.

As one of the most stable corporate banks in the UAE, Bank of Sharjah has built relationships with some of the region’s largest businesses, striving to offer the most solid, dependable and long-run banking solutions.

HEAD OFFICE: SHARJAH • BRANCHES: GARHOUD - DUBAI MEDIA CITY - ABU DHABI - AL AIN

bleed guide.indd 1 p06-07_opinion.indd 7

PRIVATE BANKING WEALTH MANAGEMENT: DUBAI MOTOR CITY

www.bankofsharjah.com

26/01/2016 13:17 2/8/16 4:43 PM

NEWS & ANALYSIS

Ole Hansen, Head of Commodity Strategy, Saxo Bank

P

ublic spending will continue to support operating conditions for banks in the Gulf Cooperation Council (GCC), allowing performance to remain resilient into 2016, but liquidity will continue to tighten.

Khalid Howladar, Senior Credit Officer at Moody's based in Dubai

O

il prices will continue to be a major story through 2016, with increased supply set to come from Iran after the US sanctions were lifted. Can oil stabilise?

Crude oil remains the major story. The price has now slumped by one-third since the Opec meeting on 4 December ended in disarray.

Chinese trade data from the end of January 2016 helped reduce demand worries after imports in December surged to a record 7.8 million barrels, some 10 per cent higher than the year before. This helped stabilise the price above $30 per barrel for a number of days but news that sanctions against Iran could be lifted within days helped trigger renewed selling.

"The question remains how quickly Iran can increase its production. A survey carried out by Bloomberg to which I contributed found that Iran is likely only to increase production by 100,000 barrels/day per month after sanctions are lifted and by 400,000 barrels in six months' time.

After years of sanctions and underinvestment we doubt that Iran can just turn up the volume and it will take longer than the market believes before full its potential is reached. If this turns out to be the case, it may eventually help oil to stabilise."

8

p08-09_News analys.indd 8

Despite the headwinds generated by low oil prices, we expect a broadly supportive operating environment for GCC banks in 2016 due to regional governments' commitment to their counter-cyclical spending policies. Events such as the UAE Expo 2020 and World Cup Qatar 2022 are providing anchors for capital expenditures in addition to other key regional infrastructure projects.�

WWW.WEALTHARABIA.NET

2/17/16 10:53 AM

Oliver Williams, Head of WealthInsight

C

ould the GCC unpeg their currencies from the US dollar? Because of recent developments, speculation in the market that such a move could take place has popped up more often.

Trevor Cullinan, Standard & Poor's sovereign analyst

T

he tech sector, the source of many of the world’s richest individuals, is no longer creating wealth at the rate that it once was. A Wealthinsight study of the world’s 10 largest markets for tech HNWIs has shown that all bar two—Germany and Sweden—have slowed since peaking in 2012-2013.

Data that those earning their wealth from tech and telecoms are decreasing adds to fears of a tech bubble. Just as the recent tech boom has created a wave of new entrepreneurs, the curbing of their ranks is reflective of the industry’s slowing.

"While we hear talk of unicorns [private companies valued in excess of $1 billion] and bubbles, the subsiding in HNW growth is largely caused by the industry’s maturity. It is apparent that there is less room at the top for successful start-ups that are the key drivers of wealth.

"With venture capitalism at an all-time high we are seeing less founder-owned companies at the top. Entrepreneurs are sacrificing equity for investment and rocketing valuations so that, when a tech firm does make it to unicorn status, there are less billionaire beneficiaries."

In our view, although the risk of such an event coming to pass has increased, we expect GCC countries to maintain the exchange rate peg over the medium term, mainly because we assess GCC states as having sufficient funds available to defend their currencies. Most MENA currencies are pegged or linked to the US dollar".

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p08-09_News analys.indd 9

9

2/17/16 10:53 AM

‘Well’ positioned FOR 2016 AS 2015 CAME TO A CLOSE, DRAMATIC HEADLINES ON THE DROP IN THE PRICE OF OIL AND THE POTENTIAL IMPACT ON THE GCC REGION CONTINUE TO DOMINATE. ASHISH MARWAH, DIRECTOR, ADS SECURITIES ASSET MANAGEMENT, HAS ANOTHER PERSPECTIVE: A POSITIVE OUTLOOK FOR 2016

T ASHISH ASHISH MARWAH MARWAH

10

p10-11_Investment.indd 10

he headline of oil falling below $40 a barrel has sent shockwaves across the region, with investors experiencing a swift and sharp decline in regional equity markets. The reality for global markets is that that the drop in prices can be attributed to a relatively short-term excess of supply and not a result of an underlying lack of demand for hydrocarbons.

We are seeing a reallocation of surpluses from producers to consumers, which is increasing the demand for oil, and in its turn reducing the oversupply gap. The resurgence of consumer demand after a long period of deleveraging in developed markets is taking time and, in the transition period, is leading to a drop

in oil prices. Despite this the UAE and the GCC countries have the fiscal strength to be able to bridge this temporary drop in oil revenue through 2016 into 2017.

The largest economy experiencing this change is China, where the Government and the People’s Bank of China (PBoC) are carefully managing the transition to a consumption driven economy. In fact, the per capita consumption of oil in China is the tenth that of the US, which leaves ample room for growth in imports. With the largest middle class in the world, China’s consumption of hydrocarbons and agricultural commodities is only going to rise from here.

For investors with an eye on the region, it is very important to put the current low

WWW.WEALTHARABIA.NET

2/17/16 10:56 AM

INVESTMENT

oil price cycle into context. Over the last 40 years, the amount of GDP in the UAE derived from oil has fallen from 90 per cent (1971) to 33 per cent (2014). There has been a complete turnaround in the Federal economy, with the creation of a number of diversified sectors that are able to support continued growth even if the oil price remains a long way from where it should be.

There will naturally be a short-term effect on the region, and governments can be expected to introduce budget cuts, which will have a multiplier impact on SMEs and some sectors. But this is not necessarily a negative. This as a cycle associated with a maturing market. It shows a normal response to any drop in liquidity in any diversified market. And the impact of reduced federal income will ultimately push many governments to introduce long-delayed reforms.

The first of these, which the International Monetary Fund (IMF) has been calling for, is a sales tax in the region.

A meeting in December has paved the way for a pan-GCC tax (VAT) to be in place by 2018. Commentators have incorrectly characterised this as a ‘knee jerk’ reaction to the low oil prices, but institutional investors looking at the region see this as a way of adding fiscal stability. Sales tax is important in strengthening balance sheets and providing greater fiscal control to governments.

For the regional markets, we maintain our positive view for all stocks outside of the energy and banking sectors. It may surprise many people that in 2016 we also maintain a neutral position towards real estate, as we do not see the same criteria which led to the mass liquidation of the sector in 2009. The areas for investment are healthcare, tourism and we will be looking to market activity in the industrial and technology space.

The market for IPOs has been very depressed with very few coming to the table in 2015. This is unlikely to change until Q2 2016, when we believe that the number of initial public offerings will start to take off. This will be driven by the general global tightening of liquidity as companies look to raise or increase capital through public offerings.

We will also be closely watching the issuance of Federal debt through 2016. This will have some important implications for the region. Firstly, the GCC has one of the lowest ratios of government debt to GDP so there would potentially be a lot of interest in the paper, boosting regional liquidity.

Secondly, and the most important point for us, it would allow a yield curve to be established which other debt can be priced against. This would then allow corporates to price their paper into the market. The lack of a regional yield curve has always inhibited corporate issuances.

So, the question is who will be investing in the GCC and the UAE in 2016? We anticipate emerging market specialists will continue to increase their portfolio weighting towards the region.

These investors are long term, traditional in their approach, and will see real benefit from the increased sector and fiscal diversity. They will also be focused on moving investments from older emerging markets such as Brazil and Egypt, which are less able to deal with the current market realignments.

Over the last few years, the UAE’s regulatory framework has evolved significantly. Mutual funds draft regulation has gone out to consultation, and this year the investor relations rules were published which continues to improve transparency and corporate governance in the market. And as these regulations are adopted in the UAE, they are being

implemented in other regional markets.

The greater the confidence in the regulatory environment, the stronger the demand from both private and institutional investors.

There has always been strong regional investment in currencies and for many traders, it has been a difficult year with much volatility. We still view the main trend as the strength in the US dollar, which for the region has been a positive. The peg of the dirham to the dollar has kept the cost of imports low.

The US Federal Reserve is looking for the dollar (index) to trade lower but at the same time introduce a degree of fiscal tightening to their market. This should maintain the dollar in its current range. This is in contrast to the Chinese economy, which is opting to move away from its link to the dollar and has introduced a basket of currencies which it is measured against in order to continue the devaluation of the Renminbi.

In conclusion, some investors may be pessimistic about 2016 but for the region there are many positives. We see strength both in the US and European economies, with unemployment dropping and industrial growth, particularly in Europe. As we go through a period of resource realignment and reallocation in the emerging markets, as they transition from producer to consumer economies, oil will continue to trade below its expected (real) value. But this will eventually reverse and the diversified economy of the UAE offers genuine emerging market investment opportunities.

Ashish Marwah is the Lead Investment Manager and Advisor at ADSS Asset Management. Ashish’s career spans from 1998 where he held key senior roles within leading organisations, as well as managed emerging market hedge funds that figured among the top performers by Hedge Fund Review (HFR).

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p10-11_Investment.indd 11

11

2/17/16 10:56 AM

INVESTMENT

Finding the right STRATEGY FOR 2016

RAMI SAYEGH

RAMI SAYEGH, HEAD OF PRIVATE BANKING AND WEALTH MANAGEMENT AT BANK OF SHARJAH, LOOKS PAST A ROCKY 2015 TOWARDS WHERE HE SEES VALUE FOR INVESTORS IN 2016

W

e expected a very volatile and difficult market for the second half of 2015. Mid 2015 we spoke to our clients and advised them to reduce risk and lock in profits if possible.

Our core investment recommendations performed well: the equity market in Germany, the equity market in the US and the international real estate. Our defensive portfolio anchor enjoyed another excellent year. Beyond that, alternative investments which we recommend to investors to use for diversification purposes generated strong gains and helped to stabilise overall returns during the turbulent summer months. Only commodities, which we recommended with a neutral weighting, delivered disappointing results.

Ongoing economic weakness in China and Chinese currency devaluation caused at the start of 2016 massive price drops for global equities and commodities in addition to high levels of volatility. A strong US dollar, the outlook for rising policy rates in the US, political instabilities as well as geopolitical tensions, were strong headwinds in the second half of 2015 and in the beginning of 2016.

In many ways, we expect that 2016 will be very similar to the second volatile half of 2015. Investors will continue to invest money in equities because of a continuing low interest rate environment. However, over the next few months investors will have to be bold

12

and need nerves of steel, much like they did in 2015. Our core forecasts reveal that taking on controlled risks is likely to be rewarded with above-average returns in the year to come.

Attractive opportunities in global stock markets are still there, but investors may need to adapt to higher volatility and focus more on the long term. While equity market volatility will remain high in 2016, investors need adequate exposure to this asset class.

Equities still offer satisfactory upside potential on the back of attractive valuations, growing money supply, the absence of a lot of attractive investment alternatives in fixed income and attractive dividend yields. We recommend entering 2016 with a regional focus on European equities and German equities in particular due to their low valuation. In addition the US market with its defensive qualities, is an important performance stabiliser for any portfolio.

In the fixed income space, corporate bonds remain attractive relative to highquality government bonds, which is why investors should overweight corporate bonds within their fixed-income portfolios.

Within the corporate bond segment, medium-quality bonds and selected highyield bonds offer the best risk-return profile.

Reducing risk, diversification and waiting for opportunities is a good strategy. Building exposure in less risky assets such as precious metal will help the diversification process, in addition to real estate opportunities in attractive markets such as Germany.

Current price levels for precious metals are attractive in our point of view and valuations are likely to pick up during 2016.

Oil prices will remain low in 2016 and will have an impact on liquidity and the business of GCC institutional clients and oil-related companies. Increasing volatility in the capital markets and the geopolitical tensions will also affect negatively regional businesses.

We expect to see less liquidity available with clients and more cautious investing.

BACKGROUND ON BANK OF SHARJAH-COMMERZBANK PARTNERSHIP Bank of Sharjah and Commerzbank AG, one of the leading banks in Germany, signed a cooperation agreement in 2012 to offer the best in wealth management and investment solutions to individual and corporate investors in the UAE and the Middle East region.

With cooperation partner Commerzbank AG, Bank of Sharjah provides traditional and alternative investment opportunities tailored by a German bank, with full access to its integrated capabilities. The cooperation reflects the best of both banks; the local bank flavour and client relationship offered

by Bank of Sharjah and the international investment expertise and exposure of Commerzbank AG.

WWW.WEALTHARABIA.NET

p12_Investment Sharjah Bank.indd 12

2/17/16 10:58 AM Contract Publishin

WWW.CPIFINANCIAL.NET

Our financial media expertise... ...at your service

BESPOKE MEDIA COFFEE TABLE BOOKS NEWSLETTERS MAGAZINES ANNUAL REPORTS MICROSITES

Access our unrivalled experience in publishing and let us help you tell your story CONTACT VINOD@CPIFINANCIAL.NET PHONE NUMBER: +971 (4) 391 3725

p12_Investment Sharjah Bank.indd 13 Contract Publishing Ad.indd 3

2/8/16 4:47 PM 2/8/16 4:28 PM

The emerging WEALTH PARADIGM THE FUTURE OF WEALTH MANAGEMENT IS PROFITABILITY COMBINED WITH SUSTAINABLE SOCIAL IMPACT, ACCORDING TO REZA DARI, CHIEF EXECUTIVE OF GLOBAL INVESTMENT BANK

PROJECT HIGH DOMINION AND ITS FIRST PROJECT, THE INTERNATIONAL FILM FUND, ARE AIMED AT PROVIDING SIZABLE RETURNS FOR INVESTORS WHILE CONTRIBUTING TO POVERTY ALLEVIATION THROUGH IMPACTFUL SOCIAL INITIATIVES. REZA DARI, CHIEF EXECUTIVE OFFICER, GLOBAL INVESTMENT BANK LIMITED

14

WWW.WEALTHARABIA.NET

p14-18_Cover interview.indd 14

2/17/16 10:59 AM

COVER INTERVIEW

IN A CHALLENGING LANDSCAPE, NEW OPPORTUNITIES EMERGE

2015 was yet another eventful year for the financial industry as the equity markets experienced new levels of volatility. Data from the Dow Jones indices show global equities devaluating by $3 trillion within the first two weeks of this year amid fears of economic slowdown in China together with weakening demand for oil and strengthening US dollar, putting downward pressure on equities, commodities, bonds and currencies. While markets have braced for a sluggish 2016, wealth managers may find a silver lining to the declining global economy by transforming crisis symptoms to fuel for growth and innovation.

Although cyclical contractions are inherent to the fundamentals of financial markets, the increased frequency of market volatilities and liquidity crisis in the recent years may be pointing to a different kind of crisis–an expanding consumer confidence crisis perpetuated from the 2008 financial crisis. The ensuing global recession destroyed over 30 per cent of the global wealth wiping out trillions of dollars of consumer and household wealth around the world as a result of which we are now faced with an evolving disruption in the consumption and investment behavior of key actors and investors becoming increasingly skeptical of the global markets and the financial sector.

While traditional private banking and wealth management have been fundamentally built on the self-centric interpretation of wealth, the perception of wealth is going through a profound transformation driven by a new generation of consumers and investors growing increasingly mindful of sustainability and social impact when it comes to creation, preservation and application of wealth.

This holds especially true for the millennial generation born between 1982 and early 2000s, which according to the World Economic Forum stands to inherit over $40 trillion in the coming years.

A NEW GENERATION FOCUSED ON SOCIAL IMPACT AND SUSTAINABILITY

A 2013 US Trust report suggests that although millennials and younger HNWIs

are skeptical of stock markets and traditional equity investing, they have a higher risk appetite for investments with positive social and environmental impact. Referencing a separate report by the Brookings Institution, 84 per cent of millennials consider corporate social responsibility a key factor when making purchasing decisions. It may also be compelling to note that according to the same report, four of the largest US banks are among the 10 least-liked brands in America. This highlights a growing sense of distrust towards the traditional culture of Wall Street which draws urgency to the need for action to revise conventional business and operating models in order to stay compatible with the consumption and investment needs of the next generation of clients. Though this might be perceived as a challenge for traditional institutions, it presents progressive wealth managers with a unique opportunity to replace the longstanding ʻchase-the-money’ approach to a new ‘direct-the-money’ approach through innovative investment solutions capable of infusing profitability with sustainability and purpose. The future of wealth management is impact-oriented investment solutions.

YOU DON’T HAVE TO SACRIFICE PROFITABILITY TO MAKE A SUSTAINABLE IMPACT

We want to demonstrate the fallacy of a common misconception, which assumes an inherent conflict between money and morality–between profitability and social impact. According to a recent study by Morgan Stanley Institute for Sustainable Investing, sustainable investments have mostly “met and often exceeded” the performance of comparable traditional investments. There are various other reports that suggest impact investing can compete with and has in fact outperformed the S&P 500 for many years. So the simple fact is, you don’t have to give your wealth away nor do you have to compromise on profitability to make a positive social impact. In contrast, with Project High Dominion we propose that sustainable impact investing will not only enhance the quality of wealth but it can also enhance profitability. ...cont. overleaf

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p14-18_Cover interview.indd 15

15

2/17/16 11:00 AM

cont. from page 15

WHAT IS PROJECT HIGH DOMINION?

Given all the philanthropic grants, humanitarian and governmental aid today there is still an annual deficit of approximately $2.5 trillion to adequately address challenges associated with global poverty, food security, and climate change. Financial institutions continue to make significant financial contributions to the fight against poverty as part of their Corporate Social Responsibility, but CSR as a purely competitive business strategy has limited social impact unless the underlying corporate values are fundamentally aligned with core human values and a genuine sense of moral responsibility. Giving away your change is good but today poverty is begging for a different kind of change. Money alone cannot and will not solve the problem of global poverty for exactly the same reasons money and capital performance have failed to produce a sustainable global economy. So long as our experience of wealth remains insular in nature, our world will continue to experience extreme poverty and the global economy will continue to experience crisis and volatility.

Project High Dominion was conceived as an alternative to the exclusionary interpretation of wealth aimed at making sustained contribution to the betterment of life by advocating for a morally-oriented culture of commerce and finance. It is a collaborative platform for investment managers, financial institutions, public figures, and private enterprise to promote and participate in innovative “impact-oriented� financing solutions and profitable philanthropic investment products genuinely capable of infusing profitability with sustainable impact. It will also include a fixedcost asset management product line designed to enhance capital growth while appropriating all associated management performance fee revenues to sponsor and fund sustainable child and human development programs in the most impoverished parts of the world.

16

REZA DARI, CHIEF EXECUTIVE OFFICER, GLOBAL INVESTMENT BANK LIMITED

THE PURPOSE OF WEALTH DEFINES THE VALUE OF WEALTH AND THE MORE WE RECOGNISE THIS REALITY, THE MORE RELEVANT WE BECOME TO HUMANITY.

WWW.WEALTHARABIA.NET

p14-18_Cover interview.indd 16

2/17/16 11:00 AM

COVER INTERVIEW

I SEE AN EVEN BIGGER OPPORTUNITY IN USING INTERACTIVE AUDIENCE PARTICIPATION NOT ONLY IN PRODUCING THE NEXT MADE-TO-ORDER ENTERTAINMENT EXPERIENCE BUT MORE IMPORTANTLY, TO ENGAGE OUR SOCIAL STAKEHOLDERS IN FOCUSING AND GUIDING THE IFF SOCIAL IMPACT.

THE INTERNATIONAL FILM FUND – A HUMANITARIAN APPROACH TO FILM PRODUCTION

With the IFF, we are dedicated to capital performance for our investors, while allocating 50 per cent of the fund manager’s performance fee revenues to humanitarian initiatives, so our investors wouldn’t have to sacrifice profitability for social impact. By simply participating in the IFF and being part of a unique commercial venture, investors would directly contribute to the alleviation of global poverty. Once launched, the IFF will be the first professionally managed large-scale film fund domiciled in the DIFC focused on funding and producing premium Hollywood films. But the IFF will not be limited to Hollywood as we intend to replicate the same model to eventually include the regional and international film industry.

We have spent the last two years collaborating with seasoned industry experts and producers to acquire a comprehensive understanding of the Hollywood film industry and production related risks with the view of extracting the highest possible value for our investors with minimal risk exposure. Furthermore, we are currently in the process of structuring a downside principal protection mechanism prior to the official launch this year designed to further safeguard our investors’ capital.

Aside from the high barriers of entry, production related risks are perhaps the biggest challenge facing investors looking to apprehend value in premium film financing. We see production risk as the biggest inherent risk in film making, which could ultimately translate to financial risk.

It is not uncommon to see film projects go above and beyond projected budgets and completion deadlines which can expose investors to possible financial risk, especially those passive investors with very little control over the project management process. Even if a film performs reasonably well at the box office, it may still be considered a financial failure due to high production costs. While completion bonds play a critical role in minimising project completion risks, due consideration must be given to professional management oversight to minimise production costs, maximise production efficiency, and at the same time enhance output quality and financial performance. For that very reason, the IFF investment strategy utilises the collective expertise of in-house production professionals with over 50 years of combined industry experience to oversee and manage the acquisition and production of our projects.

To assume that a passive investor could stumble upon the next Harry Potter franchise is nothing short of wishful thinking unless the required core

competencies have been acquired to package and create the next successful brand. Financial success of a film is not only dependent on the quality of cast, directors and script, but also on marketability, release time, and public opinion. A pre-requisite for financial success is active professional oversight throughout the entire project, starting with origination and development to production and distribution. After reviewing nearly 200 scripts and packaged films over the last year, our production team has selected 10 of the strongest projects with the highest expected box office sales and ancillary revenues. In addition to our own slate, we are also in discussions with a number of award-winning independent producers and major studios to explore co-production, P&A, and completion financing opportunities. In short, what we look for in a project is quality combined with commercial viability and most importantly ancillary revenue potential.

The question here is—to what extent can you control the creative direction of the films you produce to ensure maximal quality and commercial success? We are very adamant when it comes to managing the creative direction of our projects.

While we are keen to collaborate and work with major studios, our production team will be actively involved in the creative direction of our films and remain mindful of new distribution platforms ...cont. overleaf

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p14-18_Cover interview.indd 17

17

2/17/16 11:00 AM

COVER INTERVIEW cont. from page 17

REZA DARI, CHIEF EXECUTIVE OFFICER, GLOBAL INVESTMENT BANK LIMITED

to better ensure optimal output. We intend to establish a successful brand by managing the creative direction and quality of our feature films. We’re not only looking at revenues generated from the international box office or ancillary revenues alone, our ultimate objective is to develop real commercial value by creating a purposeful premium brand.

AN INDUSTRY ALONE

According to the Motion Picture Association of America, international box office sales exceeded $36 billion in 2014, $4.6 billion of which was contributed by the Chinese box office alone. Worldwide cinema screens increased by six per cent in 2014 largely due to the double digit growth in the Asia Pacific Region. Steady upward trends in the number of international theatrical screens and box office revenues appear to have very little correlation with the general economy. This non-correlation is further magnified in times of economic

18

downturn, as films tend to outperform other conventional investments. 2015 for example, was a highly volatile year for the financial markets, but in contrast happened to be one of the best performing years for the motion picture industry with Star Wars: The Force Awakens breaking through the $1 billion barrier faster than any other film in history. According to Rentrak Media, 2015 US box office sales are estimated to have crossed $11 billion setting a new record for the industry, surpassing the previous 2013 record of $10.92 billion. With this in mind, inclusion of film assets may be considered by wealth managers as an ideal alternative for a diversified portfolio allocation strategy.

INTERACTIVE AUDIENCE PARTICIPATION FOR POSITIVE SOCIAL IMPACT

The internet together with new digital technologies have already started to reshape the traditional film industry. The IFF

business model highlights the use of new technologies and distribution methods to further enhance financial performance by lowering production and distribution costs.

With recent developments in digital file compression and download technologies, producers can now bypass conventional distribution channels and deliver movies directly to end-viewers globally. But beyond new production and delivery methods, I see ‘interactive audience participation’ as the future of entertainment. Moreover, I see an even bigger opportunity in using interactive audience participation not only in producing the next madeto-order entertainment experience but more importantly, to engage our social stakeholders in focusing and guiding the IFF social impact. I envisage the IFF as the next generation motion picture brand dedicated to sustained social impact in partnership with its shareholders, consumers and social stakeholders.

The insular culture of commerce and finance is becoming increasingly irrelevant to the cultural values and financial needs of the next generation of clients. The new generation of consumers and investors are looking for inspiration to help restore their confidence in corporate values and the financial sector.

And let us not forget that as actors of the global economy, private enterprise, and wealth managers in particular, have a moral obligation towards greater socioeconomic integrity. We are convinced that the new paradigm of wealth is profitability infused with purpose.

Paraphrasing the words of Victor Hugo, I believe: “there is one thing stronger than all the wealth in the world, and that is an idea whose time has come.” Well, here is the idea we are banking on: the purpose of wealth defines the value of wealth and the more we recognise this reality, the more relevant we become to humanity.

Global Investment Bank Limited (GIB) is a company limited by shares incorporated in the Dubai International Financial Centre and regulated by the Dubai Financial Services Authority (DFSA). GIB provides services only to Professional Clients and Market CounterParties as defined by the DFSA.

WWW.WEALTHARABIA.NET

p14-18_Cover interview.indd 18

2/17/16 11:00 AM

INVESTMENT PORTFOLIO

MANY INDUSTRIES ARE EXPECTED TO MAKE BIG GAINS AS A RESULT OF GLOBAL INTEREST IN WELLNESS.

INVESTING

in the wellness craze AS THE WORLD’S FOCUS ON AND UNDERSTANDING OF HEALTH AND WELLNESS INCREASES, INVESTORS IN THE REGION NEED TO GET MORE INVOLVED IN A GROWING INDUSTRY, WRITES FABIANO VALLESI, NEXT GENERATION ANALYST, JULIUS BAER

PHOTO: SHUTTERSTOCK

T

he world has made huge advances in containing infectious diseases, but that progress is being partially offset by a sharp rise in the incidence of heart and lung diseases, diabetes, lifestyle-related cancers and other non-communicable diseases.

One of the major drivers of the increase in these diseases is the rising prevalence of obesity. Obesity has become the fifthleading global risk for death, accounting for 3.4 million adult deaths per year according to the World Health Organisation (WHO).

The continuous increase in healthcare costs and the potentially devastating effects of illness provide a strong rationale for prevention for governments.

THE COUNTER TRENDS: REGULATION AND SHIFT IN CONSUMER DEMAND Exercise, wellness and a healthy diet are now widely considered effective in preventing the obesity epidemic to spread even more. Governments and corporations are playing their part in encouraging people

to engage in physical activity and a healthy diet also by increasingly considering taxing fatty food or sugar and offer health premiums at work among others. At the same time, consumer awareness for the benefits of eating healthy is growing as well as the popularity of sports and leisure activities.

The trend for a healthier lifestyle is also fuelling the demand for mobile apps and wearable technology. This technology is empowering people with self-examination tools and the possibility of personalised healthy lifestyle and cures. ...cont. overleaf

19

p19-20_Health.indd 19

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

19

2/17/16 11:01 AM

INVESTMENT

PORTFOLIO

cont. from page 19

20

p19-20_Health.indd 20

370

350 330 310 290 270 250 2006 2007 2008 2009 2010 2011 2012 2013 2014 T otal g lobal athletic m arket at retail

GLOBAL HEALTH AND WELLNESS FOOD MARKET U SD bn 1'000 900 800 700 600 500 400 300 200 100 0

F ood Intolerance O rg anic F ood/ Beverag e N aturally H ealthy F unctional F ood

2019E

2018E

2017E

2016E

2014

Better F or Y ou 2015E

born between 1980 and 2000) are driving the uptake of physical activity and fitness.

According to Nielsen, over 65 per cent of millennials participate in fitness sports, the highest rate of any demographic cohort.

Other drivers for the rising global popularity of sports and leisure activities are to be found by a growing adoption by women, older demographics and citizens in emerging markets. We see the $375 billion (retail) global athletic industry as a key beneficiary from this trend.

U SD bn 390

2013

Dina Ghandour, a Dubai-based entrepreneur, founded yApparel, a start up that has found success tapping into the wellness boom.

“Since yApparel opened in 2013, we have definitely seen a boom in the number of yoga and fitness studios emerging—with a clear spike in the last year,” said founder and manager of yApparelGhandour.

“With limited options to choose from in the UAE, yApparel was created to meet a growing need for high quality yoga and fitness apparel in a range of prices and styles specifically for the booming local yoga and pilates communities. We’re bringing something to Dubai and the wider region that so many people are hungry for, and the response so far has been outstanding.”

2012

WELLNESS ENTREPRENEUR DINA GHANDOUR

Advances in technology have facilitated the emergence of affordable wearable devices which enable to track a broader range of biometric data. This is allowing individuals to turn towards technology solutions to improve health and fitness. In our opinion, consumers might increasingly view the connected health and fitness products and services as an alternative or complement to other H&W activities. We believe that health and fitness-related wearable devices have a potential addressable market as large as the broader health and fitness market of over $200 billion.

The next time you sit in a long boring meeting you might be tempted to count the number of colourful rubber bands and smart watches adorning more and more arms of office employees.

Hopefully, the gadget owners might not only want to look hip and trendy but also intend to improve their health as every step seems to count to help lift somewhat the global burden of obesity.

2011

A BROAD RANGE OF INVESTMENT OPPORTUNITIES Prevention is increasingly a focus for governments and consumers to tackle the global obesity epidemic. We see many attractive investment opportunities arising across a number of sector value chains in the health and wellness (H&W) theme: healthy food producers, nutrition supplements businesses, as well as fitness-related providers servicing the increased demand for a more healthy and active lifestyle.

While it is too early to argue that fat or sugar is the ‘new tobacco’, there is an increasing call for calorie, sugar or fat taxes, which have been passed in more than ten countries in recent years. Many foodproducing companies are realising that it is wiser to invest now than potentially be forced to do so via future regulation, taxes or a stronger shift in consumer tastes.

We expect companies with exposure to H&W-centred product portfolios might benefit from this growth as well as companies which are proactively adapting products to it (i.e. less fat, sugar, fewer calories, natural ingredients, and more beneficial ingredients).

Fast-changing consumer demands have led to accelerated, more technically complex product innovation. Speed of execution is key for food manufacturers and new trends must be met quickly and rarely does a food manufacturer have the expertise to do it all internally (even the global giants). The resulting collaborative or 'open' innovation process is putting quality ingredients companies in a stronger position. We therefore believe that the nutritional supplement industry is increasingly a beneficiary of consumer H&W demand and will fare better than the food producers.

Physical inactivity is the number four factor for global deaths, with 31 per cent of global adults not doing the recommended 20 minutes of physical activity per day (63 per cent in the UK, 43 per cent in the US). Governments are thus setting targets to tackle physical inactivity.

At the same time, millennials (people

SOURCE: EUROMONITOR, JULIUS BAER, ESTIMATES

WWW.WEALTHARABIA.NET

2/17/16 11:01 AM

HOUSE

Business

ision awards 2016 FinanceME is pleased to announce that the awards evening for our Business Vision Awards 2016 will take place on 23 March 2016 at the Jumeirah Emirates Towers, Dubai.

Nominations will be accepted until the end of February.

The nominations remain open across 20 categories catering to SME service companies, start-ups, franchises and SME businesses.

CATEGORIES

Awards for business service: • Best Business Technology Provider • Best IT Services Provider • Best Business Advisory Service • Best Accounting/Auditing Service • Best Law Firm • Best Business Consultancy • Best Business Solutions Provider Awards for business: • Top Seller 2015 (retailing) • Top Trader 2015 (trading) • Top Manufacturer 2015 (manufacturing) • Top Developer 2015 (construction/development) • Top Services 2015 (service sector) • • • • • • • • •

Best giving back initiative of the year Best Practice in Employment Best Start-up Most Improved Company of the Year Best Established Business Best Small Business Best Home-Grown Brand Best Franchise Inspirational Business Person of the Year

To enter, head to our nominations page on the website www.cpifinancial.net – pick your category and submit 300 words explaining why YOUR company deserves to win the award!

HAPPY NOMINATING!

p19-20_Health.indd HOUSE AD.indd 1 21

2/17/16 AM 2/8/16 11:01 5:01 PM

PHOTO: ARKHIPOV ALEKSEY/SHUTTERSTOCK

Anticipating the NEXT MEGATREND WITH BIG RETURNS IN THE CURRENT ECONOMIC CLIMATE HARDER TO FIND, COULD MEGATRENDS LIKE ROBOTICS BE THE BEST PLACE FOR YOUR INVESTMENT?

BY PICTET ASSET MANAGEMENT 22

p22-24_Investment.indd 22

WWW.WEALTHARABIA.NET

2/17/16 11:02 AM

INVESTMENT

change across North Africa and parts of the Middle East.

Analysing and understanding these changes is one of the most practical endeavours investors can undertake. As Warren Buffet once said: “In the business world, the rear view mirror is clearer than the windshield”. What makes understanding megatrends especially important is the fact that the world is being buffeted by many forces of change at the same time.

FROM MANUFACTURING TO HEALTHCARE, ROBOTICS WILL BE A MAJOR FORCE THROUGHOUT THE 21ST CENTURY.

Megatrends are powerful geopolitical, environmental, economic, social and demographic forces shaping the globe, which will have a significant effect on the investment landscape for the next decade and beyond.

They include innovations in technology and science, the growing economic power of emerging markets such as China and Brazil, and the ageing of populations in much of the industrialised world. Evidence of these profound changes is everywhere—from the growing number of Chinese holidaymakers travelling abroad, to the way in which new forms of web-based communication have helped bring about sweeping social

WHAT MAKES A MEGATREND? So, how do you distinguish megatrends from other, less powerful, forces at work in the world?

In our view, for a source change to qualify as a megatrend it should exhibit certain characteristics: it must be pervasive, disruptive and self-sustaining, something that represents a transition from one fundamental structure to another. The distinct group of pervasive megatrends that we have identified include: Sustainability: the ability to meet the world's current resource needs without compromising the ability of future generations to meet theirs. Over the coming years, demand for food, water and energy will grow at a pace that exceeds the rate of population growth. By 2040, global demand for energy is expected to increase by 37 per cent and for food by some 50 per cent. At the same time, it is predicted that around 1.4 billion people will not have access to clean water.

Commercialisation: the increasing propensity among governments worldwide to outsource public services to the private sector. Examples include the provision of water and energy.

Individualisation: the process through which individuals are having a greater influence on their own environment.

Acceleration: the speeding up of technological innovation over time.

Renewed focus on health: ageing, rising wealth and technological advances are helping make health a major area of expenditure for governments, organisations and individuals worldwide.

These trends present opportunities for human ingenuity to show its worth. The need to use the world's natural resources in a more sustainable way, for example, has unleashed

huge waves of technological innovation, particularly in the areas of water treatment and recycling, transport and energy provision.

A renewed focus on health, meanwhile, is leading to the development of a new range of sophisticated pharmaceutical products.

HOW CAN INVESTORS ACCESS THESE TRENDS? Investors looking to invest in companies capitalising on the megatrends shaping the world can take a number of different approaches. One potentially rewarding option is to invest along thematic lines. At Pictet Asset Management, we have developed a number of thematic investment strategies that offer investors effective ways to capitalise on the longterm forces of change in the global economy.

Each of our nine thematic strategies centres on a distinct sphere of corporate activity—a market or industry that sees its prospects heavily influenced by at least three megatrends. Looked at another way, each investment theme sits at the intersection point of many megatrends.

For example, our timber, water, clean energy and agriculture strategies allow investors the opportunity to have a stake in those companies that possess the expertise and products that will help the world better manage its natural resources. Others, such as our biotechnology and health strategies, seek to take advantage of the growth in demand for specialist pharmaceuticals, medtech and healthcare IT, which are increasingly important in a world where populations are ageing and where innovation and efficiency will be key to managing health budgets which are already stretched.

ROBOTICS Our robotics strategy seeks capital growth by investing in companies at the forefront of technological innovation that are revolutionising a variety of industries. It provides investors with the opportunity to capitalise on a theme that is growing faster than the global economy, whilst helping to solve global challenges that impact each aspect of our everyday lives.

Robots are no longer confined to the factory floor—they are now part of our lives. ...cont. overleaf

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p22-24_Investment.indd 23

23

2/18/16 4:18 PM

INVESTMENT cont. from page 23

They are becoming cheaper, smaller, smarter, safer and more energy efficient, as well as gaining flexibility, dexterity, mobility and ease of use. This increases the breadth of their potential applications, tapping unserved markets, such as small and mid-cap companies which may not have been able to afford robotics in the past.

Through the robotics strategy, we have defined three investable areas to the theme: Industrial automation; consumer and services applications, and enabling technologies. Within these, we have carefully selected pioneering companies that are leading the market in their fields.

Industrial automation includes companies that produce a new generation of robots aimed at further automating industrial processes. An example of this is the use of cobot or ‘collaborative robot’ in manufacturing. Cobots are designed to safely assist workers in a given task.

The advantages of cobots are that they are more affordable, flexible, versatile, and safe to use compared to larger industrial robots.

Consumer and services applications involve robotic and automation solutions aimed at applications for everyday life. Examples of this include surgical, telemedicine and hospital robots, which are transforming the healthcare industry.

The company Intuitive Surgical has become the leading technology producer in minimally invasive robot-assisted surgery and their da Vinci system became the first FDA-cleared robotic surgery system in July 2000. The company has a market capitalisation of $19 billion, and currently has no direct competition in their surgical robots segment, continuing to innovate and introduce additional functionalities to broaden its range of applications.

Enabling technologies are technologies that enable robots to sense, process, communicate and act. These are the technologies we refer to when we talk about artificial intelligence or ‘deep learning’ in robots. A great example is the machine vision system, which provides robot’s eyes (cameras) and brains

24

p22-24_Investment.indd 24

(hardware and sensors), allowing them to perceive their environment. The machine vision market is expected to be worth $9.5 billion by 2020, a CAGR of 12.5 per cent* thanks to the accelerating demand for non-industrial applications (logistics, postal sorting, medical imaging, intelligent traffic and surveillance). Another example is Cognex, a world leader in vision systems which enable camera vision technologies and the robots that they are incorporated into. Cognex products are utilised into a wide range of industries, such as pharmaceutical, automotive, healthcare, aerospace, consumer goods.

INVESTING IN GLOBAL DEVELOPMENT These innovative companies give investors the chance to benefit from the growth of cutting-edge technologies.

But they also enable them to contribute to the solutions to some of the world’s biggest issues.

A core example is manufacturing robotics, which enhance global productivity by bringing production back that has been outsourced out of developed markets, and addressing the challenge of increasing labour costs in emerging markets. The developments in robotics contributes to a more efficient use of resources and brings production closer to consumers, reducing high carbon footprints.

In healthcare, service robotics have played an important role in improving the quality of life of the elderly, and enhancing their independence. Falling birth rates and an ageing society has led to fewer entrants to the labour market and increasing care needs for the elderly, but this is being complemented by automation. Robotics also play a big role in the customisation of products, through new technologies like 3D-printing, and through smart factories and logistics.

Identifying a megatrend requires economists to project what changes will shape our world. Developing a megatrend strategy requires the careful analysis of companies through their advisory boards,

industry networks, and research providers, to establish what proportion of their activities are relevant to the megatrend. At Pictet Asset Management, we analyse the proportion of enterprise value (EV) related to the theme through net sales, EBIT, EBITDA opportunities, to make sure that it is at least 20 per cent on a stock basis.

Our scoring process reviews each company’s fundamentals and valuation together with risk factors, analysing their purity, trading liquidity and share price volatility to determine initial portfolio weights. Each companies’ score includes fundamental business franchise analysis, management quality and equity attractiveness. Finally, the best stocks are selected to create a diversified portfolio of high conviction stocks with the most attractive risk-return potential.

THE FUTURE OF MEGATRENDS By 2050 the world population is expected to reach nine billion and the percentage of the population over 60 will double. This presents a need to enhance productivity globally. In developed markets, this means bringing back production that has been outsourced to emerging markets. In emerging markets, this means addressing the challenge of increasing labour costs.

Research shows that in developed markets, higher robot density can improve productivity. And in emerging markets, dwindling labor supply and rising wages favour automation.

As a result of this, the robotics theme is set to grow faster than the global economy, while helping to solve global challenges.

It will gain breadth in its uses, and enter aspects of our everyday life.

Investing in megatrends can be rewarding for those with a long-term investment horizon. These strategies look beyond companies' quarterly results and volatile swings in the economic cycle and focus instead on the profound secular trends influencing our world. It allows investors to focus on the future, and not the past. *Source: Canaccord Genuity, November 2014, Machine Vision market report of July 2015

WWW.WEALTHARABIA.NET

2/17/16 11:02 AM

PRIVATE BANKING

THE SWISSQUOTE HEADQUARTERS IN SWITZERLAND.

A Swiss bank IN YOUR POCKET AS A TECHNOLOGY BANK, SWISSQUOTE LETS ITS CLIENTS BANK, TRADE, AND INVEST FROM ANYWHERE. CEO DAMIAN HITCHEN SAT DOWN WITH WEALTH TO DISCUSS HOW THE BANK IS CATERED TOWARDS THE JET SET HNWI Tell me about Swissquote.

As the name suggests, we are a Swiss bank.

Our headquarters are in Switzerland, we’ve been registered on the Swiss stock market since 2000 so we are a full-listed bank,

with international offices in London, Hong Kong, two in Dubai, and Malta. The bank was founded in the mid-1990s and we are slightly unique in that we are purely a technology bank. We don’t have branches,

we don’t have tellers—essentially what our clients do is park their cash with us in Switzerland and do their global trading with us. For clients here, we are an offshore, fully online bank. Everything people ...cont. overleaf

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

25

WE ARE DEFINITELY SEEING A STRONG MOVE ACROSS THE WHOLE WEALTH MANAGEMENT INDUSTRY MOVING TO PROVIDE MORE DIGITAL SERVICES. – DAMIAN HITCHEN

cont. from page 25

do with us they do via telephone or email, or typically, once we have them set up, they log on to their account and they deal with us via PC, laptop tablet or smart phone.

Everything we do at Swissquote centers around providing the customer with the best experience but via their preferred means of working with us.

How long have you been in the UAE? We have two offices in the UAE. Our FX office looks after our Forex trading clients and my office here in the DIFC looks after our banking and securities trading clients.

That includes clients who simply want to have an offshore bank account to those who wish to do some trading with us, which can be as little as buying a mutual fund to more experienced traders who trade in derivatives, forwards, swaps or more. This office was set up in 2013 but we really opened for business in January 2014.

Some people have felt disappointment with the pickup for mobile and online banking in this market. Have you found that as well?

If you compare this market generically with the US or Europe, yes. There is more of a relationship manager culture here, with clients who like to do things physically. For our clients,

26

WWW.WEALTHARABIA.NET

this is not a problem, because our clients prefer to deal with things online or remotely. Since we opened here, we have about 1,300 clients, and all of them, amongst other things, have come to us because they like to deal remotely with their bank. They like to know that if they need to they can do something on their smart phone, laptop, or to call us if they need to get something done. Our typical clients are international expatriates, middle to senior management, and keeping with us an average balance of around $100,000—a priority banking type client. We do have some clients that have millions with us but typically they range from premier and priority all the way up to private banking clients. We also have a strong B2B business as well.

How many of your clients are coming to online banking for the first time?

Our clients tend to be already tech savvy and are already dealing with another bank, they just prefer to take their assets and cash out of the country off shore and either use it as an online bank account or use it for savings, investment and trading.

What is the main benefit?

First and foremost, ease of use and accessibility. You can use us how you want to, when you want to, from where you want

to. Our platform is live 24/7, 365 days a year. The client can go and have a look at their positions, their cash balance, they can make payments, and when markets are open, they can trade.

For example, of our 1,300 clients at the moment we have about 500 Emirates pilots.

The benefit for them is that they travel seven days a week around the world—they need something accessible wherever they are in the world.

The second benefit is, because we don’t have lots of branches, physical bricks and mortar, and a huge staff, we are a low cost operator compared to traditional banking models. We are able to pass on those cost savings to our clients. For example, if you are doing basic banking, sending money from A to B or doing remittances, we are much more competitive than most local banks here. If you are changing currencies, we typically give more competitive rates than most banks here. What we’re able to do because of our technology base and because we don’t have the normal fixed operating costs of traditional banks, is to pass on those savings to our clients.

Third, it’s a matter of choice. For those clients that want to do savings and investments with us via their offshore bank account, they can access 65 global

PRIVATE BANKING

markets, across all asset classes, and, in total 2.62 million financial products from our platform. From your bank account you can access 12,500 mutual funds. If you are interested in electronically traded funds [ETFs], you can access 42,000 on our platform. It’s a huge choice compared to what you can get compared to local, international, and even private banks here.

I would say we are unique globally, as I’m not aware of any bank who has the breadth of offering that we have.

Is this because you are forced to innovate constantly?

Part of our DNA is innovation. We are always looking to innovate. We are a technology bank—a fully licensed and regulated one, with all the bells, whistles and protections that come along with that—however from a cultural perspective, we are more like a technology company than we are a traditional bank. We look at what our competitors are doing in the marketplace and our competitors are not just the banks, they might be, for example, foreign exchange companies, payments companies such as Paypal, they might be online asset management and investment companies—from our perspective, our competitors are not just banks, it’s the entire financial technology (fintech) industry.

Can you give me a demographic breakdown of your clients?

Globally, we have about 230,000 clients. A lot of those are from our traditional markets, such as Switzerland and Europe, etc. Of our 1,300 clients in the UAE, we have 103 nationalities among those clients. It’s a reflection of how international this region can be.

Being a forward–thinking company, how do you see that fitting into the future of private banking versus your competitors?

Do you see things moving towards the way of Swissquote, or do you think the broader industry will remain the same?

We own and build our technology, of our 540 staff about 25 per cent are software

developers. Everything we do is in house and has been for 20 years. Globally, we have about 500 white label partners, essentially other banks and financial services companies which use our technology, brand it with their own logos, and use it to serve their own customers. We are definitely seeing a strong move across the whole wealth management industry moving to provide more digital services.

Let’s say you are a private bank here, you may ask for five or 10 million dollars from your client to maintain a relationship but even though clients will want to take their advice face to face, they will want to log in and see their portfolio in real time. There is no doubt in my mind from what I’ve seen around the region in the last 16 years, what we are seeing globally is that all financial institutions are moving towards digital solutions. We are in a number of conversations with local, regional and international banks about exactly that. They are looking to widen their proposition and looking to provide a digital offering to their clients. That can span retail clients, mass market, mass affluent, priority clients or private banking clients, but the common thread amongst them is that they all want to move to offer things via remote technology.

This works well for us because, with that type of relationship, we are a partner, not a competitor, as we do not compete with their core business. They tell us they want this type of offering for this segment, we build it for them, and then they use it for their clients.

In Switzerland we have recently completed a technology solution for a bank called Post Finance who will move across 60,000 clients, and EUR 4 billion worth of assets onto our technology.

They wanted to move more towards a digital offering so they partnered with us, chose their tailor-made offering for their clients and we have delivered a whitelabelled platform that allows their clients increased choice and functionality, but with their logo, branding and look and feel to their end-clients.

How have you changed products depending on customers use?

Recently we rolled out a service called Themes trading. Historically, mutual funds might be about investing in a region, country or industry sector. But recently, the industry has moved towards more thematic investments. What we have done is taken a theme, such as clean energy, and given people a house view on a number of underlyings which operate within this theme category.

We launched this in June 2015, and we have launched over 50 themes which are forward looking, and topical investment ideas for clients consideration.

In the middle of last year we launched something called the Currency Calculator, which gives clients the ability to compare our Forex rates as compared to a local bank.

It’s very easy for banks to say they give better rates, but we give people the ability to verify this. In 2015 a large part of our revenues has been from people exchanging currency with us, which is a strong validation that we give better rates in comparison to local banks.

How often are customers using their accounts?

Our clients transact with us between 15 and 20 times per year from a purely trading side. From my private banking experience, that’s competitive against what a normal private banking client would do. This excludes people doing FX and remittances, which may bump that up to 35 to 40 times a year. Of the 1,300 accounts that have been opened, 80 per cent are funded and active which is a strong validation that we are offering a proposition our clients value and use.

What do you have planned for 2016 and beyond?

The expat account, which is our offshore banking and trading platform, will see increased take up. About 35 per cent of our new account openings in 2015 have been from personal referrals. I’d say by the end of next year I’d like to have doubled our end of 2015 customer base.

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

27

PHOTO: NOTARYES/SHUTTERSTOCK

PROPERTY

ANIL KAPOOR GREETS FANS AS HE ARRIVES AT THE OPENING CEREMONY FOR MISSION IMPOSSIBLE WORLD PREMIERE

Will systems FOR ALL NEW UAE LEGISLATION GIVES NON-MUSLIMS A CLEARER PATH TO PASSING ON THEIR PROPERTY AND ASSETS TO THE NEXT GENERATION. THE DIFC WILLS AND AND PROBATE REGISTRY GIVES INSIGHT 28

p28-29_Property.indd 28

WWW.WEALTHARABIA.NET

2/17/16 11:04 AM

What is the DIFC Wills & Probate Registry (the Registry) and what does it offer?

Legal uncertainty regarding inheritance has always been a concern for non-Muslims in the UAE as to the legal procedure following the death of a non-Muslim, and the distribution of the deceased‘s assets.

The DIFC Wills and Probate Registry is a first-of-its kind service in the MENA region. It gives eligible individuals with assets in Dubai the ability to register English language wills according to the principle of testamentary freedom, meaning the freedom to dispose of their property upon death as they see fit, and in accordance with the laws of their home country.

The new service assists non-Muslim expats in registering their wills and follows a legal basis that has been drafted on the basis of Common Law principles from the Estates Act and Probate rules of the UK, and legislation of other leading Common Law jurisdictions such as Singapore and Malaysia.

This legislation gives non-Muslims legal certainty and the freedom to determine how their assets will be distributed upon their death and it builds upon existing UAE legislation.

What is the benefit of having such a registry in Dubai?

Dubai is increasingly becoming the leading hub for High Net Worth Individuals to invest their surplus capital. According to recent industry reports, Dubai is considered to be a safe haven for ultra-wealthy investors and families thanks to its world-class infrastructure, high-end lifestyle options and high return investment opportunities.

The Emirate’s real estate market alone saw an eight per cent increase in investment last year, reaching AED 267 million.

Over the past ten years the country has attracted $100 million (AED 367 million) foreign direct investment. These numbers, strengthened by notable government initiatives and by the upcoming Expo 2020 clearly show the significant potential for further growth of foreign investment into Dubai.

In the past, expats would need to find alternate mechanisms to ensure their wealth and estate was transferred according to their wishes. Often, this meant transferring this wealth to foreign countries where the legislation provided them this freedom.

The Registry provides non-Muslims that same freedom while retaining their capital in the UAE, contributing to the overall investment environment. This change in legislation could drive substantial growth incentivising foreign investors to keep their assets in the country by assuring them that their wealth will be in their control.

On that front, the Registry fosters economic growth and business activity while creating a mutually beneficial relationship with global investors.

How can expats protect their assets under the WPR? To ensure complete protection of their assets, expats need to formally register their will with the DIFC Wills and Probate Registry during their lifetime.

The will appoints an executor, a party who can be either a company or person that the individual making the Will fully trusts. The executor is then responsible for administering the estate and distributing the assets to the beneficiaries listed in the Will. Expats can also appoint guardians for their minor children.

The will provides full authority to the individual to decide the order of priority of the beneficiaries, the time and the conditions of distributing the estate and any instructions they might want to leave for their family or loved ones.

For the will to be probated through the DIFC Courts, registration of a Will with the Registry is a pre-condition which works as an opt-in mechanism.

An individual may modify their Will at any point during their lifetime, but the document is only given effect by a judge at the DIFC Courts after the death of the individual. It is also recommended that the will be made in consultation with a licensed legal practitioner, to advise on drafting the will and to ensure compliance with the Registry’s legal basis.

What is the process of registering a will?

An eligible individual can formally register their drafted will with the DIFC WPR in a simple one-hour personal appointment which is booked online. A single will registration covering Dubai assets and guardianship costs AED 10,000. Mirror wills, meaning those that are made by a married couple, cost AED 15,000 instead of 20,000. If an expat only wishes to appoint guardians for his or her minor children, a guardianship will can be registered for AED 5,000 and AED 7,500 for mirror guardianship wills.

The structure is designed in a manner that front-loads the cost mostly on the individual who is registering the will. The probate cost, meaning the cost after the will comes into effect is significantly lower. A Grant of Probate is a fixed fee of AED 5,500 irrespective of the value of the estate. No inheritance tax is applicable in the UAE on assets held here.

DIFC WILLS AND PROBATE REGISTRY The Wills and Probate Registry (The Registry) is an ancillary body of DIFC’s Dispute Resolution Authority (DRA) established

by Resolution No. 4 of 2014 issued by H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, the President of the Dubai International Financial Centre (DIFC).

The Registry provides a simple and efficient opt—in mechanism for eligible individuals to pass on their estates via the means of registered wills, according to their wishes. While the Registry operates as a distinct entity, it is under the jurisdiction of the DIFC Courts, which handles all probate claims related to the registered wills. The rules governing the Registry reflect the spirit of UAE laws that respect the cultural and religious diversity of people working and living in the country. www.difcprobate.ae

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p28-29_Property.indd 29

29

2/17/16 11:04 AM

PRIORITY BANKING

Islamic banking FOR THE HNWI FOR WEALTH MANAGEMENT AND PREMIUM BANKING SERVICES, ISLAMIC BANKING IS AN EXCELLENT CHOICE FOR HIGH NET WORTH INDIVIDUALS, ACCORDING TO RENOY KUNDUKULAM, HEAD OF PRIORITY BANKING, NOOR BANK

Can you tell me about what services your priority banking division offers to its customers?

In the Middle East, the priority banking segment focuses on high value clients, with minimum investible assets of $100,000.

This is the industry benchmark and at Noor Bank, we follow the norm too. Within the framework of priority banking, there are three main pillars that we are focused on.

One is the wealth management solution that we provide, second is the financial services and benefits through all other relationships that the client holds with us, and third is lifestyle benefits. Everything we offer focuses on these three aspects of banking.

In Wealth Management, we offer many investment options to suit our clients’ financial needs. Based on the client’s risk profile we have capital protected instruments for our conservative clients and on the other end, we have Equity & Commodity Mutual Funds for aggressive investors.

When we look at designing these wealth management solutions we take into consideration that this is hard earned money for the client and therefore protection, preservation and growth all come into play.

We have Sukuk, structured deposits, international mutual funds, facility

to invest in physical gold, options to enhance yields for our clients, and we also offer leveraging options on some of those investment solutions. Another interesting offering is the dual currency deposits. Just like a conventional bank, we participate in almost all the asset classes, however keeping in mind the Shari’ah regulations.

When I talk about financial services and benefits, clients don’t just come to us for wealth management solutions. They sometimes have other financing needs, such as: home finance, auto finance, personal finance, or a credit card. All of our products and solutions are done through a Shari’ah-compliant process and all the solutions are directed there.

It is interesting to note that there is a high level of overlap between a Priority client and a home finance customer (of almost 70 per cent), which is typically our resident clients buying property of around AED 3 million or more— so by default we treat them as priority clients. All of these services do come at preferential pricing. A priority client will get better pricing on all their solutions as opposed to a standard customer. A credit card could be free for life as long

as they are banking with us in the Priority Banking segment.

The third pillar is the lifestyle benefits.

Our relationship with our valued clients goes beyond banking as we ensure we speak to them to understand their lifestyle needs and help them fulfil them with ease.

A few examples of lifestyle benefits we offer are complimentary gym memberships, golf memberships, valet parking, premium roadside assistance, travel desk, airport transfers and Marhaba meet & greet. We continue to expand our lifestyle offers to our customers to cater to their needs.

Not many people are talking about HNWI customers in the Islamic banking space. How important do you believe it is to build Islamic banking services for HNWIs in particular? And why?

There are almost 500,000 high net worth individuals in the GCC alone; these clients hold roughly $1.7 trillion of assets. A large majority of them are Muslims. Secondly, we also provide offshore banking services to clients with dedicated teams managing Pakistan, the African markets, Bangladesh and the GCC where there are clients who prefer Islamic banking. To date, if you look at ...cont. overleaf

30

WWW.WEALTHARABIA.NET

p30-33_Priority Banking Noor Bank.indd 30

2/17/16 11:04 AM

PHOTO: SERGIGN/SHUTTERSTOCK

ISLAMIC FINANCE OFFERS A HISTORICALLY SAFER INVESTMENT LANDSCAPE FOR HNWIS, AND ISLAMIC BANKS LIKE NOOR ARE WORKING HARDER THAN EVER BEFORE TO CATER TO THAT CLIENTELE.

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p30-33_Priority Banking Noor Bank.indd 31

31

2/17/16 11:04 AM

BUT BY THE VERY NATURE OF THE COMMUNITY, THERE IS AN INTRINSIC NEED TO PROVIDE ISLAMIC WEALTH MANAGEMENT SOLUTIONS. – RENOY KUNDUKULAM

cont. from page 31

the larger banks, be it in Switzerland or in other established jurisdictions, it is mainly in the conventional banking space that Wealth Management solutions have been offered to clients. But by the very nature of the community, there is an intrinsic need to provide Islamic wealth management solutions. It is a very clear gap that many of these banks today do not provide, which is why we see a faster growth in Islamic banking versus conventional banks.

What makes priority banking in the UAE unique to other markets? What differentiates its customers?

There is a slight difference that we have seen when we look at the global client base versus this part of the world. Here, they are more focused on growth of wealth, not just preservation. They look at investment solutions that can give them a strong yield. Globally, HNWIs are happier to preserve wealth with a slight growth at best to beat inflation. Here, people are keenly looking at where they can invest their surpluses and make high returns. It becomes a responsibility on us to make sure that we not only manage their money right, but also provide tactical opportunities that can give impetus for growth to the overall portfolio of the client.

We are a young bank, an upcoming bank and we have to prove ourselves to the market. We have had situations where clients fly in from Africa and want to start a relationship with us because someone they know back home said they appreciated our

32

services, hence an emphasis on service is a key differentiator for us.

Tell me about the work you have done in building your wealth management platform.

We embarked on that journey to look at our three key pillars in terms of our customer experience. We looked at every touch point, and asked ourselves, how do we make it different? We have a dedicated call centre team for priority customers. When a priority client walks into a branch, there is a queuing system that allows them to jump the queue. At every touch point, we want to treat the client like they are special, every single time that they interact with us.

To manage the high-value clients, we brought in a very experienced team.

The team is certified externally for wealth management, and only once they are certified can they interact with our clients. Every day, we send a market update report. Every week, we conduct weekly market updates to ensure that they provide the right information to clients and help the clients make informed decisions. If you are our customer, no matter who you talk to, you will not feel a difference in the language, information or strategy. We want to create a consistent standard of experience, the same as you would get in first class at the best airlines.

We evaluate different countries’ basis potential, offshore banking needs and country-specific ‘rules of engagement’ from a legal stand-point. With these

factors being in place, unlike other banks, we reach out to our clients rather than expecting them to come to us. Not many other banks would be willing to incur an extra cost to extend the level of client servicing that we wish to deliver.

What plans do you have for the future to develop these services?

Today, almost one-third of our income in the priority banking comes from nonresident clients. We believe Dubai is poised to grow, and so we are likely to see more people coming into the country as residents or transient population. Dubai is a hub, whether for tourism or trade purposes. We are right in the middle of this opportunity wherein we can assist in clients’ financial activities.

We have created a name for ourselves in this particular sector, so people know that there is somebody that is coming into the country and when they have a banking requirement, we are right there to serve them.

With oil continuing to drop, Iran sanctions over, and other major developments affecting the finance world, what are your expectations for 2016?

First came the Fed rate hike in December 2015 followed by further steep fall in oil prices towards the end of the year. 2016 began with a blood-bath in equity markets. Within three weeks of January 2016, all the gains made by most global equities in 2015 were reversed.

In the debt category, post the Fed rate hike in December 2015 and subsequent hit

WWW.WEALTHARABIA.NET

p30-33_Priority Banking Noor Bank.indd 32

2/17/16 11:04 AM

RENOY KUNDUKULAM, HEAD OF PRIORITY BANKING, NOOR BANK

on investor sentiments in early January, many debt instruments have come under stress. In 2015 clients used to leverage to get high single digit returns on certain securities, whereas now, on a plain-vanilla investment (without leverage), clients can get double digit returns.

With macro indicators tilting away from strong positivity, it is highly likely that the Fed would defer the second rate hike by another two quarters and the Bank of England is likely to follow suit. Other major regions such as Europe, Japan, China and many others are likely to continue with the monetary easing trend. Going by this, in the year ahead, we expect Europe and Japan to outperform other equity markets.

The correction in equity markets paves the way for cheaper valuations. The global PE [Price to Earnings Ratio] which was on the expensive side has again come back to long-term median levels [trailing PE of 17x].

Soon, we should see quite a few valuations looking attractive from a technical perspective.

Though, further dollar strengthening could turn investors against emerging markets.

For the Middle East’s energy-rich nations, the slump in oil prices is bringing an end to a long run of fiscal and current-account surpluses that had seemed set to leave them immune from the travails besetting other developed and emerging markets. Needless to say oil has plunged and continues to drop to levels that investors would have called ‘unthinkable’ a year ago. This would put unusually heavy pressure on the countries’ balance sheets.

All in all, 2016 will hold particular challenges in store for investors. Though in an environment of low interest rates, equities are a preferred asset class, they could be hit with poor sentiments. While real estate may offer interesting investment opportunities in pockets, adequate bond yields will probably be difficult to achieve without additional risk. Commodities could return to the centre of investor focus over the course of the year, should the current excess supply diminish. It is therefore all the more important to diversify portfolios broadly across asset classes, regions and sectors, to take hedging mechanisms into account and to think carefully.

How have the changes in the market affected your priority banking operations?

The recent market volatility has created some anxiety among our investors, but it has also opened some doors for potential buying opportunities across the globe. Global valuations appear to be more attractive with each passing week.

In line with our motto of ‘Noor Gets it Done’, the team is quite nimble footed and adept to the changes in rapidly changing market conditions. To start with, we have emphasised the importance of higher levels of engagement with clients and updating clients through our team of Relationship Managers [RMs] who meet their clients regularly.

Secondly, we conduct weekly market updates and also invite industry expert to share their views on the markets so that our RMs can help their clients make informed decisions.

Thirdly, we thoroughly examine clientwise portfolios to see if there are clients who hold assets under stress. We ensure that there is higher focus on these clients’ portfolios.

More importantly, we proactively look at leveraged portfolios to avoid margin call situations. When we see prices coming down, as a precaution, we tell our clients to bring in liquidity and avoid a difficult situation later.

All in all, the prudent and conservative lending norms that Wealth Management started with are working to the benefit of the clients as securities come under stress.

While many banks in the market are grappling with margin call situations, Noor

Bank opens doors to clients to avail Islamic Covered Drawing [overdraft] facility to help manage their liquidity under these trying circumstances.

What is the role that you play when some of your clients may fall on hard times?

In our bank, we provide customers with a CISI [UK]-certified who invests time to understand customers' needs. Through constant in-house trainings, it is ingrained in our RMs’ mind that the relationship revolves around customer need. They get to know customers' situations intimately and proactively offer advice to best protect their wealth.

They ensure that all aspects of the customer experience, including executing transactions occur easily because they can affect customer satisfaction. We put a premium on building durable customer relationships. As a result, strong customer experience creates high levels of customer loyalty. Our RMs are also trained to support clients through their trying times by offering innovative solutions to manage difficult situations.

More importantly, we proactively provide clients with data regarding their investments for them to take informed decisions.

With difficult times come new opportunities, hence our team is constantly looking for quality securities that could enhance yields for our clients.

Secondly, if we have clients who have bought good quality papers, but due to global reasons, the prices are under stress, we could look at buying more, given the fundamentals are strong, to bring down average prices.

Our central theme has always been taking the portfolio approach—to avoid putting all your eggs in one basket. Thus in stressful market conditions, this diversified portfolio approach helps in spreading the risks.

Most importantly, we guide our RMs to think of their client’s portfolios with a holistic approach; that is looking not just at their investments with us, but their broader portfolio which leads us to offer solutions that fit their specific portfolios.

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p30-33_Priority Banking Noor Bank.indd 33

33

2/17/16 11:04 AM

PHOTO: PHOTO: CREATIVEI CREATIVEI IMAGES IMAGES /SHUTTERSTOCK /SHUTTERSTOCK

ANIL KAPOOR GREETS FANS AS HE ARRIVES AT THE OPENING CEREMONY FOR MISSION IMPOSSIBLE WORLD PREMIERE.

In conversation with ANIL KAPOOR A BOLLYWOOD LEGEND FOR ALMOST FOUR DECADES, ANIL KAPOOR HAS TRANSCENDED BORDERS TO FIND SUCCESS ALL OVER THE WORLD AS AN ACTOR, PRODUCER AND BUSINESSMAN 34

p34-35_Good talk.indd 34

WWW.WEALTHARABIA.NET

2/8/16 5:08 PM

GOOD TALK

AT THAT TIME, IT LOOKED LIKE AN OVERPAY, BUT NOW PEOPLE ARE SAYING IT WAS A VERY INTELLIGENT MOVE TO BRING THIS TO INDIA AND CHANGE THE WAY PEOPLE LOOK AT TELEVISION. – ANIL KAPOOR

WHY I’M INVESTING IN DUBAI

People think that once you’re famous you get everything free, but I don’t get anything free. When I invested in Ritz by Danube, Danube’s new affordable luxury project in Dubai, it was a genuine investment. If you compare the prices in Dubai to Mumbai, it is hard to find something suitable in Mumbai. It took about five to six years in Mumbai for us to find something suitable for my daughter, and it is still not ideal. But when I was given the details to invest in property in Dubai, I found it affordable, and the right time to invest in this city. Don’t compromise on your peace of mind— invest in something like these projects by Danube that can give you all that you’re looking for, and still allow you sleep well.

THE AGELESS ONE

People call me ageless—but I don’t take it very seriously. I’m not delusional— obviously I am ageing. Everyone ages in life, and although it sounds good and I feel happy when people call me ageless, it can’t be true. It’s my family that is most important to me. That’s the most important thing God has created, and society has created, is family. That’s what makes you who you are. I believe that very strongly.

That has been the most important thing for my career, and my longevity of being in this business almost 38 years.

INVESTMENT IS ABOUT MY FUTURE

When did I first start getting interested in investment? When I got the money!

[Laughs] You first start thinking about this stuff when you have money.

At first you want to meet all your immediate requirements, but once those requirements are met, you want to invest instead of blowing all your money and wasting it on useless things. Part of it is so you can have the same kind of lifestyle the rest of your life. It’s an ideal way to look at your future.

FOLLOWING YOUR INSTINCT For me, investment is often about instinct. If instinctually you feel that it is right, affordable, and not too much of a risk, you go for it. I was able to bridge the gap between east and west out of instinct.

When I got the rights to the television series 24, it was like a property. People in India told me that it was too expensive and it would never work, but I knew that it was going to work. At that time, it looked like an overpay, but now people are saying it was a very intelligent move to bring this to India and change the way people look at television. You have to take those sorts of chances. Now I have 24, I have Modern Family, and hopefully have another big one very soon.

IT’S IN MY BLOOD

Film production has always been a part of the family business. My father is a producer and me and my brother used to produce films, so that has always been there. I’m actually the first actor in the family. Film production, making content, has been in my bloodstream. It’s a good business to be in because there’s not many content makers in the world. People have the money, people want to invest, but there has to be someone who can make the content. In today’s digital world, more and more content is needed.

There are more platforms, but not enough content to keep up, so it’s a great situation for me to be in, as a content creator since childhood.

THE BEST MOMENT OF MY CAREER The best day of my career so far was the day that Slumdog Millionaire was announced as the best film at the Academy Awards. I got the honor and the opportunity to go on stage and receive the Oscar for Best Film. I think that was one of the best moments of my life.

People living in Hollywood their whole career and don’t get that opportunity, so for me being from a small suburb in India, traveled all over the world. You do a lot of international work, but if you have the opportunity to be on that stage, for that honor, that is a big moment.

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p34-35_Good talk.indd 35

35

2/17/16 11:05 AM

MOTORING

CLASSIC MOTORING, SOVIET-STYLE Taking a Trabant trek in and around Budapest makes it easy to understand why the classic East German car is so beloved by its fans

By Tom Paye

“Derided by critics, the Trabant was a staple mode of transport on the Eastern Bloc. It was launched in 1957, and even by the standards of the day, its two-stroke engine was considered outdated and inefficient.”

T

here is slow-moving traffic ahead, the flow blocked by a choked mini-roundabout that leads onto a Hungarian highway. Rain, at first a light drizzle, begins to hammer down on the composite roof of the vehicle.

Unfortunately, this particular car is almost 40 years old, with a single wiper blade that could barely hold up against the drizzle.

Making matters worse, two-stroke fuel fumes pour in from the useless AC vents, and manually rolling down the window lets in the cold, the wet, and an alarming scent of soon-to-be-broken clutch.

A single thought comes to mind: Please don’t give out at the roundabout.

Such worry is the price to be paid when embarking on a classical car tour in and around Budapest, Hungary’s lively and beguiling capital. Much of the city’s tourism takes advantage of interest in the country’s unpleasant brush with communism when

it was annexed by the Soviet Union during the Cold War. As a result, old military bases, bomb shelters and monuments provide good fodder for adventure-seeking visitors.

Likewise, the classic car tours hark back to the bad old days, with most operators providing East German Trabants from the defunct carmaker VEB Sachsenring Automobilewerke Zwickau.

Derided by critics, the Trabant was a staple mode of transport on the Eastern Bloc. It was launched in 1957, and even by the standards of the day, its two-stroke engine was considered outdated and inefficient. That didn’t stop the Soviet Union from having them built, though; all in all, around 3.7 million Trabants were constructed until the factory closed in 1991. In East Germany, it was considered the best of a bad bunch, and before long, it began to attract affection from its owners.

Despite the car’s problems, it was, after all,

a car, and its styling made it something akin to an Eastern Bloc Mini Cooper.

While it never reached as stratospheric levels of cool as the Mini did, the Trabant still nonetheless enjoys a loyal following. Popular with classic car collectors, its cheap price— due to how many there are around—and nofrills engineering make it an easy motor to buy and maintain. Quite who came up with the idea of running Trabant tours is unclear, but the idea has caught on like wildfire in former Soviet countries. It appeals to car lovers longing for a genuine, 20th-century Eastern European motoring experience.

And that is how your correspondent finds himself in a barely working Trabant, coughing and spluttering its way to a mini-roundabout, and a lined kilometre of frustrated Hungarian drivers, eager to get home, behind him. The car has been running fine all day—through the old streets of Budapest and out into the ...cont. overleaf

36

p36-38_Motoring.indd 36

WWW.WEALTHARABIA.NET

2/17/16 11:07 AM

PHOTO: JOSE AS REYES /SHUTTERSTOCK

THE TRABANT HAS BECOME AN ICONIC PART OF EASTERN EUROPE AND BEYOND

p36-38_Motoring.indd 37

2/17/16 11:07 AM

“MECHANICALLY, THE TRABANT HARDLY EVER CHANGED OVER THE COURSE OF ITS 34YEAR LIFETIME, BUT THE EAST GERMANS MADE IT AVAILABLE IN ABOUT EVERY CONFIGURATION IMAGINABLE.”

THE TRABANT OFFERS A DRIVING EXPERIENCE LIKE NO OTHER. cont. from page 37

countryside surrounding the city—but the clutch has suffered as a result of clumsy inputs and rusty gear-changing skills.

Smoke bellows from the exhaust. Happily, this is normal for a Trabant, so it’s not an immediate worry.

This particular model is bright pink in colour, the station wagon variant—big enough to seat four adults, along with a sizeable amount of goods. There are other cars on the tour, too—a sporty-looking orange sedan, which might as well be a two—seater for all the space it provides in the back, and a more spacious blue sedan. Mechanically, the Trabant hardly ever changed over the course of its 34-year lifetime, but the East Germans made it available in about every configuration imaginable.

The orange ‘Trabant Sport’ certainly looks the part, with lowered suspension, sporty door sills, a little boot spoiler and modern-looking rims. The other two cars on the tour look battered and old in comparison, the pink station wagon being the worst of the bunch. The brake pedal is next to inoperative; a more effective method of slowing down is running down the gears. The handbrake literally is useless, and the interior is about as welcoming as a Hungarian prison cell. There’s no radio,

38

p36-38_Motoring.indd 38

no heating, and not even a rev counter (luxuries afforded by the other two cars in the troupe). The dashboard features a hilariously optimistic speedometer, which claims the car can do 70 km/h in second gear, a couple of warning lights, and that’s it.

The indicator stalk is a skinny, plastic tube, which protrudes out from the left underside of the steering wheel. And the gear lever, while a little meatier than the indicator stalk, is located where you’d expect to find the wiper controls on a modern car, on the right of steering wheel. The wiper, meanwhile, is a simple on/off switch above the centre console, next to a similar switch for the lights.

If it sounds awful, it is, by modern car standards, but that entirely misses the point.

The Trabant is regarded affectionately not just because of its looks, but also because of the way it drives. Yes, it’s fantastically slow, but, like many classic cars (and unlike many modern cars), it offers a real connection between road and driver. The steering wheel communicates every little bump on the road surface ahead, and while there’s plenty of play in the steering, the car itself is an agile little thing. Thrown into a corner at an unsafe speed (because the brakes don’t work), the tiny, skinny tyres provide

surprisingly good grip, and the body roll is kept to a minimum.

Meanwhile, the unconventional gear shifter, in American format but manual, is at the heart of the driving experience. Moving from second to third, the car lurches forward as the tiny engine gets into its power band, offering surprisingly modern levels of speed (the Trabant was marketed as a fast family car).

And while the clutch is sticky, it’s incredibly forgiving in terms of allowing the driver to find a biting point. One of the drivers on the convoy only has an automatic driving licence, but still manages to master the gearbox.

Unfortunately, your correspondent has no such luck as he gingerly approaches the entrance to the roundabout, which, as it turns out, sits on a slight incline. With the fear of rolling backwards setting in, a clumsy and confused start-off leads to a stall, which in turn leads to the car almost rolling back into an angry local couple behind. Embarrassing as the incident is, restarting the old girl is the work of a moment, and the car makes it onto the highway. The tour follows a rustic route back into the city centre, past some of Budapest’s most stunning architectural attractions. And as pleasant as the sites are, it’s difficult to shake the thought that, really, the cars are the stars of the show.

WWW.WEALTHARABIA.NET

2/18/16 12:23 PMWEALTH su

Not your copy?

The art of the build

HILL INTERNATIONAL COO RAOUF GHALI

A WEEKEND IN BOSTON A GUIDE TO THE PERFECT LUXURY EXPERIENCE 44

WEALTH Arabia is a controlled circulation magazine delivered directly to specific, named HNWI individuals across the GCC.

EMIRATES FIRST CLASS REDEFINING AIR TRAVEL 40

WINNING THE RACE TO IRAN FOREIGN TRADE $200 BILLION BY 2020 22

Institutions may also arrange bulk purchase orders of the magazine and its supplements to circulate among internal and external stakeholders.

If you wish to arrange regular bulk deliveries, please contact subscriptions@cpifinancial.net for terms.

To receive your own copy, please email subscriptions@cpifinancial.net with your following information stating ‘WEALTH Arabia’ magazine

A Greek drama for the ages IDE INVESTORS WORLDW PE RIVETED AS EURO AVOIDS GREXIT

UAE private wealth

SET TO REACH $1 TRILLION BY 2019

Island living for the HNWI FANCY YOUR OWN PRIVATE ISLAND?

NAME

Vanquish tion Carbon Edi BEAUTY,

POSITION

STRIKING ER INCREDIBLE POW

COMPANY 8/19/15 4:16 PM

COVER32.indd

24

ADDRESS LINE 1 ADDRESS LINE 2 ADDRESS LINE 3 PO BOX ZIP/POSTAL CODE COUNTRY

CPI Financial FZ LLC • PO Box 502491 Al Shatha Tower, Office 1209 Dubai Media City, Dubai, U.A.E. Tel: +971 (0) 4 391 4681 • Fax: +971 (0) 4 390 9576 • www.cpifinancial.net WEALTH subscription house39ad_31-33.indd 1 p36-38_Motoring.indd

09/11/2015 2/8/16 4:41 PM11:50

HOTELS & RESORTS

Charting growth and PRESERVING HERITAGE

QATAR’S KATARA HOSPITALITY IS BUILDING ITS OUTSTANDING AND LUXURIOUS PORTFOLIO OF HOTELS THROUGH BOTH INNOVATION AND HONORING TRADITION

RAFFLES HOTEL SINGAPORE

K

atara Hospitality, a leading global hotel developer, owner and operator based in Qatar, is set to sustain the momentum of its record-setting year in 2015, combining key iconic acquisitions with over 45 years of

40

p40-41_Katara.indd 40

experience in the hospitality industry. Having gained global recognition for its contributions to the Qatari and international hospitality landscape through numerous prestigious accolades from the industry, Katara Hospitality continues to pioneer the development of iconic

luxury hotel properties while offering seamless service in key destinations across the world.

With 35 properties in our current property portfolio and ongoing efforts towards expanding Katara Hospitality's footprint across Qatar and internationally, our company’s

WWW.WEALTHARABIA.NET

2/17/16 12:10 PM

strategic goals have become a reality. As this Qatar-based company focuses on its future international growth strategy, the impetus lies with preserving the heritage iconic properties in key destinations while reinvesting in some of our current property portfolio through renovations and upgrades. Katara Hospitality is well poised to continue to build up on its reputation as a globally renowned forerunner in the luxury hospitality sector.

INTERNATIONAL GROWTH

Katara Hospitality has not only enjoyed tremendous success as an international beacon of corporate and investment success in the hospitality sector, but has positioned itself as a leader in the development and operation of peerless hotels with interiors and design aesthetics coupled with unrivalled service standards. With a rich portfolio of properties and through partnering with some of the finest and most recognised hospitality brands in the world such as Raffles Hotels & Resorts, Fairmont Hotels & Resorts, Sheraton Hotels & Resorts, The Luxury Collection Hotels & Resorts, Westin Hotels & Resorts, The RitzCarlton Hotel Company, Marriott Hotels, Renaissance Hotels, The Peninsula Hotels, InterContinental Hotels & Resorts, Mövenpick Hotels & Resorts, Six Senses Spa , BuddhaBar Hotels & Resorts and Somerset Serviced Residences, Katara Hospitality continues to illustrate its commitment to attaining industry recognition as an organisation that is well vested in the rich heritage and legacy preservation for its properties across the world.

The result has been an enviable collection of strategically appointed hotels in Switzerland, Italy, France, United Kingdom, Netherlands, Germany, Spain, Morocco, Egypt, Singapore and Thailand.

GRAND EUROPEAN OPENINGS

To highlight our strategic expansion goals and pursuit of excellence as we strengthen our presence in global key destinations, Katara Hospitality opened and acquired further peerless properties in Europe last year.

Opening to grand acclaim was the Peninsula Paris, a short distance from the historic Parisian historic landmarks Champs Elysees and the Arc de Triomphe. Synonymous with old European

PARK RECEPTION LOBBY LOUNGE

BUDDHA BAR HOTEL PARIS GRAND HISTORIC SUITE

charm and characterised by heightened levels of distinction and French hospitality in the heart of one of the world’s most architecturally impressive cities, the Peninsula Paris was meticulously restored with contemporary trimmings that exude 21st century elegance while offering modern day conveniences.

The property in itself is a Parisian icon, one which has masterfully captivated its touristic audience since its opening. Serving as a testament of the luxurious offering that characterises this flagship property in the French capital, the iconic hotel was awarded the coveted “World’s Leading Landmark Hotel” at the recent esteemed World Travel Awards held in El Jadida, Morocco.

In Italy, Katara Hospitality reopened the award winning Excelsior Gallia Milan, a Luxury Collection Hotel in Italy’s fashion capital. This achievement was coupled with the acquisition of Westin Excelsior Rome from Starwood

Hotels & Resorts Inc. Reflecting the sheer magnificence and essence of Milanese culture and sophistication, the Excelsior Gallia Milan also underwent a massive renovation, with influences from renowned Milanese designer Marco Piva, revealing an architectural gem that has become one of the city’s destinations for a high-end contemporary experience.

The picturesque Lausanne Switzerland welcomed the opening of the lavish Art Nouveau style Hotel Royal Savoy Lausanne, which Katara Hospitality also recently restored to its former glory showcasing rich heritage and historic charm on the backdrop of contemporary luxurious design and first-class service provision at the landmark property.

Expansions in Italy, France and Switzerland have been key milestones, further cementing Katara Hospitality’s commitment to growth in key destinations.

The journey to growing Katara Hospitality as a globally recognised organsation and hospitality brand that it is today has involved careful consideration of multiple tenets. We have always been tenacious in our quest to become a Qatari-based organisation that has stretched beyond its limits to become a key contributor of Qatar’s economy and the hospitality and tourism landscape. Our approach is entirely strategic, wherein we target iconic landmark buildings that defy the expectation of our guests. We aspire to surpass the expectations of our guests in design, aesthetic and overall experience through luxurious service provision. Our properties are characterised by superior products which exhilarate the senses of esteemed travelers that grace us with their stay.

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p40-41_Katara.indd 41

41

2/17/16 12:10 PM

LUXURY TRAVEL

FROM DUST TO DECADENCE Sarah Owermohle writes on navigating the chaos and beauty of India’s Golden Triangle with Scott Dunn

A

representative of Scott Dunn once told me that one of the biggest challenges for the travel company was simply expressing to potential clients what it is they that do.

She said this as we watched the sun descend on a secluded polo field in the family-owned Dera Amer reserve in Rajasthan, India. We were dusty and tired from our trek through the forests on the backs of elephants—and the elephant face painting

42

that ensued, naturally—but were about to tuck into a private dinner of the best local cuisine with Udaijit, the owner of the quiet reserve.

Yes—it’s quite hard to explain exactly what Scott Dunn does.

The luxury tour operator, which has been offering bespoke tour experiences around the world for almost 30 years now, could say that the ‘Golden Triangle of India’ experience is the jewel in its crown. The tour, which includes Delhi, Agra, Jaipur

WWW.WEALTHARABIA.NET

p42-44_Luxury travel India.indd 42

2/17/16 11:19 AM

and occasionally Udaipur, takes travelers through timeless forts, bustling cities and idyllic rural landscapes.

Visiting a place like India is a daunting task for any, but Scott Dunn prides itself on delivering real cultural experiences to its clients amidst the luxury and comfort. In one day in Agra, visitors can take in the Persian-inspired Itimad-ud-Daulah, or ‘Baby Taj’, before strolling the eye-opening Mughal Heritage Walk through the village of Katchpura. The Walk hires youth from smallholder

farmer villages to guide visitors through daily life in areas often unseen by every day tourists. Less than a kilometre down the road from Katchpura, travellers can gaze on the world’s most lasting monument to love, the Taj Mahal, from across the lazy Yamuna River. It is a slightly different view of the iconic landmark than the one out visitors’ window each morning as they stay at the luxury Oberoi Amarvilas, a Scott Dunn partner and the only hotel in the area with an uninterrupted view of the “tear drop on the cheek of time,”

PHOTO: SEB C'EST BIEN/SHUTTERSTOCK

TRAVELERS TAKE A TWO MINUTE DRIVE FROM OBEROI AMARVILAS TO SEE THE TAJ MAHAL AT DAWN.

...cont. overleaf ISSUE THIRTY FOUR - JANUARY - MARCH 2015

p42-44_Luxury travel India.indd 43

43

2/17/16 11:19 AM

TRAVELLERS HAVE THE CHANCE TO PAINT ELEPHANTS AT THE SECLUDED DERA AMER RESERVE. THE OBEROI RAJVILAS SITS ON THE EDGE OF THE ‘PINK CITY’ OF JAIPUR.

as Nobel laureate Rabindranath Tagore once called it.

It is experiences like these, that navigate the canyon between modernity and history, chaos and beauty, that give the Scott Dunn tour experience its unique flavour. Truly knowing the cities and sights of a place like India requires constant trips by Scott Dunn’s own travel consultants, who make an annual monthly visit to their favourite locales, finding new and exciting attractions and checking in on classic experiences.

Though it’s easy to see why the Oberoi hotels are Scott Dunn favourites, the bespoke experience naturally extends to where you will lay your head at night. In Jaipur, the historic ‘pink city’ of Rajasthan, travelers can choose to stay in the Oberoi Rajvilas, complete with wandering

44

peacocks and serene ponds surrounding a 300-year old temple.

Alternately, there is the quiet, quirky Samode Haveli, a 19th century Indian mansion converted into a boutique hotel that—with its narrow hidden staircases, colorful antique furniture and old family photos on the walls—transports travelers to another era. Scott Dunn has cultivated relationships with both hotels along with dozens of tour guides, drivers, shopkeepers and craftspeople to truly deliver on the promise that “everything we do is totally customised around you”.

PHOTO: CURIOSO/SHUTTERSTOCK

cont. from pg 43

Scott Dunn offers a luxury 10 night itinerary to India exploring the Golden Triangle from AED15,710 per person.

This includes luxury accommodation, a private driver throughout, guides and experiences. For more information visit scottdunn.com.

WWW.WEALTHARABIA.NET

p42-44_Luxury travel India.indd 44

2/18/16 12:25 PM

AVIATION

Luxury air travel,

ANYTIME, ANYWHERE

NOTHING CAN COMPARE TO THE BESPOKE CONVENIENCE AND HIGH QUALITY SERVICE THAT ROYAL JET PROVIDES TO CLIENTS ALL AROUND THE WORLD, WHETHER FOR LEISURE OR EMERGENCY, SAYS CAPT. W. PATRICK GORDON MAS, INTERIM PRESIDENT AND CHIEF EXECUTIVE

CAPT. CAPT.W. W. PATRICK PATRICK GORDON, GORDON, INTERIM INTERIM PRESIDENT PRESIDENT & & CEO CEO OF OF ROYAL ROYAL JET JET AND AND WALTER WALTER HEERDT, HEERDT, SENIOR SENIORVICE VICE PRESIDENT PRESIDENTVIP VIP & & EXECUTIVE EXECUTIVE JET JET SOLUTIONS SOLUTIONS OF OF LUFTHANSA LUFTHANSA TECHNIK TECHNIK

Could you tell me the history of Royal Jet? The company is the brainchild of His Excellency Sheikh Hamdan Bin Mubarak Al Nahyan, Minister in the UAE Federal Cabinet. About 12 years ago, we were looking at the royal family, and there were a very small restricted number of airplanes available. It all came out of one billfold— Sheikh Zayed’s personal finance department.

So we thought, well, ok, let’s see if we can build something like a Netjet within the royal

family, and they can all buy shares and we can spread the expense of the operation over a greater number of people. So we ran that idea up the flagpole and they came back and said that wasn’t a good idea, and they would rather we set up a completely separate charter operation where when a member of the royal family wants an airplane next weekend, they pay and the situation is settled, so there is no political influence, it’s just a cash and carry operation.

The idea was first set up to support presidential flight, which was flying quite heavily back in those days. The idea was that we would do ad hoc charter, and it’s been a very successful idea over the past 12 years now. We’re up to 11 airplanes now. We are the largest Boeing Business Jet (BBJ) fleet in the world with six, and we have just taken delivery from Boeing for two more BBJs, which has gone through a place called PATS based in Delaware, US which has installed long range tanks and enhanced vision, which really improves the safety, low visibility and nighttime operations.

They are both finished there now and both have been flown to Lufthansa in Germany for their major interior work. The first one will take delivery for operations in October 2016, and the second will be ready to go operationally in December 2016. We operate worldwide as ad hoc charter. People call in, make an appointment, we arrange the finances involved in the trip. We like to think we are the foremost charter operator in the Middle East and North Africa, as we do go to extremes to try to tailor-make the flights for our customers.

We have profiles on all of our clients that we try to keep updated, and keep a record to maintain their likes and dislikes, and ...cont. overleaf

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p45-47_Royal Jet.indd 45

45

2/17/16 12:07 PM

AVIATION cont. from pg 45

A LOOK INTO THE INTERIOR OF THE NEW BOEING BUSINESS JET.

have things on board that they want. We of course call and find out what particular sort of catering they like and we merge that with the catering profile we have with each of our regular passengers. We have very nice and comfortable interiors in our airplanes and they are kind of unusual. Most BBJs you see in the US will be equipped for about 13

46

p45-47_Royal Jet.indd 46

people and that’s it. We have a wide variety of environments available. Almost all the BBJs have a bedroom in them, as well as given number of first class seats, as well as some upscale economy type seats. A lot of times the families here travel in quite large numbers, so we have to try to cater to the whole family.

What else differentiates the clientele here in terms of what they need and want?

The clientele here is really interesting because these folks are highly sophisticated, wealthy, top one per cent of people in the world, and for them, the airplane is an extension of their home. When they get on the airplane they expect to be treated like it’s their home, and

WWW.WEALTHARABIA.NET

2/18/16 12:26 PM

even though we might use those terms for our seating. It’s almost all upscale and it’s almost always a close group. Sometimes it’s a football team, or a government delegation, and they all seem to find their own seating pecking order on their own.

The passengers are pretty much similar throughout the world, in our experience.

When you look at people in this category of wealth, they have high expectations and they can afford to pay for high expectations. It doesn’t matter what part of the world you are from, their standards and the things they want and don’t want are all pretty much the same. They want privacy, security, confidentiality, and they want to travel in style. They want great catering which we try to provide, suited to each group’s taste.

With so much luxury innovation happening from airlines in the region, how does this affect Royal Jet? I’ve been asked if I’m concerned about the new residence compartments on the new Airbus A380s, that have suites and butlers and top class catering, and whether feel threatened by that. I don’t feel threatened; I think it’s a great idea! For us, this shows first class passengers that something better is possible. We provide that same class of services no matter when and where they want to go. Rather than have them try to book their schedule around getting this service on the A380, this allows people to have it when they need it. This has introduced the idea to High Net Worth people who can already afford first class that there is something better.

the only difference is this home travels at .78 mach speed! We try to make them feel as much at home as we possibly can.

How much does that change with clientele around the world?

It’s not your typical airline crowd, where you have business, first and economy class,

What about the medical services you provide?

Probably 20 per cent of our business is medevac flights, and we do that literally all over the world. We have a full medical team that go with the patient. We go when the patient is fit to fly. We get a request saying that, for example, we have a patient who needs to go to the Mayo Clinic in the US, and we have a doctor who visits the patient to make sure they are fit to make that flight. We can take them in an airplane with one stop, so we will pre-position

a crew in Reykjavik, stop there, change the crew, refuel, and head to the Mayo Clinic in Minnesota. You can’t do that in a regular airline. It’s very difficult to set up the kind of medical capability that we have onboard our airplanes in a commercial airline. It takes us around three to four hours to change it out and get the medical evacuation crew on board, as well as at least one doctor on board and probably a nurse as well depending on the seriousness of it.

We’ve transported patients from babies in incubators to injured people of any age.

Can you say with certainty that it’s been a life-saving service?

Most assuredly, yes. But the interesting thing that is changing is that, in the past, we would fly people out for services. But now the Cleveland Clinic is building in Abu Dhabi, Dubai is building Medical City, and the idea is that they will attract medical flights into the country instead of going out. If there’s any change in our flying, it’s going to be flying out empty and coming out with a patient, as opposed to the opposite. We’re making every effort to be a strategic part of that as it develops.

What else do you have on the docket for 2016 and beyond?

We have opened a fixed-base operator in the Seychelles, which has been running successfully for two years now. We are working on setting up another in Eastern Europe.

We’ve just signed a contract with the UAE air force to provide a whole range of training to their personnel from ground support, to pilots, to engineers. That’s going to be very worthwhile for us to participate in. And it’s fun to contribute to the growth and development of this country. I’ve been here 26 years now and I originally came to train local nationals to fly executive jets. It was absolutely fascinating to see these young kids whose fathers may not have driven a car, and all of a sudden their son is flying an executive flight around the world.

It’s been a fascinating transition to watch, and it’s been wonderful to work with Royal Jet and to continue to provide that same service and train more UAE nationals in all these other categories.

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p45-47_Royal Jet.indd 47

47

2/17/16 12:07 PM

LUXURY

without guilt How luxury brands must adapt to the sustainable consumer, by Dr. Nicholas Ashill, Professor of Marketing and Chalhoub Group Professor of Luxury Brand Management

B

y 2050 the world population is expected to have reached 9.6 billion, and the pressure on the finite resources of the earth will have increased substantially. Sustainability will be an increasingly urgent challenge for the whole world, if serious shortages of resources are to be avoided. In practice, sustainability means adjusting the way we live and the way we do business so that we don’t deplete the earth’s resources faster than those resources can be replaced. This noble goal is also a serious challenge; not a single nation has yet reached sustainability; even the most environmentally-conscious nations are still consuming resources at an unsustainable rate. Business leaders have a substantial obligation to help in this sustainability goal, through increasing the productivity of inputs and through the reduction of waste, through improvements in the way products are produced, packaged and distributed, and in the durability of those products.

SUSTAINABILITY CAN SAVE LUXURY Luxury and sustainability are two words you may not expect to find in the same sentence. After all, isn’t luxury about

48

p48-49_Luxury.indd 48

making products that are not essential?

And isn’t sustainability about making fewer things? Increasingly, however, you will find these concepts side-by-side as these two important 21st century trends find it necessary to learn from each other.

Businesses are finding that the concept of luxury becomes more palatable when seasoned with sustainability, and environmental campaigners are learning to collaborate with, rather than oppose, luxury brands.

WE HAVE ENTERED THE ERA OF MASS LUXURY; THE DEMOCRATISATION OF LUXURY. The image of luxury remains problematic.

Luxury is often seen as exclusive, elitist and egocentric. Luxury is also associated with trivial, hedonistic things that do not matter.

We use the word “luxury” to contrast with “necessity”, and to indicate things that are nice but not necessary. I would argue, however,

that this usage of the word is wrong, and that actually, there is nothing more essential than luxury.

Luxury can, and must be defended; we should not be shy about its value. Luxury maintains traditional crafts, and acts as a benchmark of product quality. It serves as an inspiration and an ideal, and provides a representation of perfection. Luxury is a valuable component of any society and societies which have tried to ban luxury have soon found that quality at all levels of production starts to degrade. Luxury products act as the aristocracy of production, they provide inspiration, example and innovation to all levels of the productive process. In an age when the product and service quality that customers experience is still too poor too often, we need the concept of luxury now as much as ever.

Luxury does not primarily mean excess or waste, it means quality. Luxury is of course a relative term; luxury means having something better than average, but it is not necessarily exclusive. TV was a luxury in the 1950s, but is commonplace now. Luxury is now available to everyone.

Whilst not everyone can afford a luxury car, most people have the ability to

PHOTO: SHUTTERSTOCK

THE DIAMOND HAS BEEN CONTROVERSIAL IN THE LUXURY WORLD.

WWW.WEALTHARABIA.NET

2/17/16 11:22 AM

LUXURY

spoil themselves occasionally with a spa treatment or a weekend at a boutique hotel.

We have entered the era of mass luxury; the democratisation of luxury.

COMBINING LUXURY AND SUSTAINABILITY The enduring importance of the environmental movement has forced product designers to find new ways of bring sustainable values into luxury products, as shown by the diagram below.

While not often thought of as being similar, sustainability and luxury are more alike than we might think. They share core values such as: emphasis on the origin of materials, the quality of the production process, the originality, simplicity and restraint of design, and the precision with which products are distributed and marketed. The two concepts are in many respects highly compatible, although the complexity of global supply chains makes merging luxury and sustainability far from simple in practice.

How can luxury be improved in practice by principles of sustainability? Two short examples of firms adapting to growing consumer pressure for sustainability may help illustrate: The diamond is perhaps the ultimate symbol of luxury, but diamonds were in danger of representing something less attractive, a way of funding military conflict, following a report by Global Witness in 1998. To prevent the image of the diamond being forever damaged, the industry created a Kimberley Process Certification Scheme in 2002 which verifies the location that the diamond is sourced from Industry leader De Beers reviewed its supply chain processes and created a Register of Diamonds that each and every De Beers supplier is required to operate with. De Beers additionally went to the extreme step of microscopically branding each of its diamonds with the De

Sustainable Products

Luxury Products

BETWEEN SUSTAINABILITY AND LUXURY, A HAPPY MEDIUM CAN BE FOUND.

Beers Marque—a De Beers logo and unique diamond number, to guarantee customers that it did not sell “blood diamonds”. In 2005, the global industry also established the Responsible Jewellery Council as a regulator of conduct. The image of the diamond as a symbol of luxury had been shaken by its association with conflict, but the industry was preserved.

A more modern, but equally potent symbol of luxury is the iPhone. Apple has been under pressure for many years to improve its record of sustainable production. Its customer base is affluent and environmentally aware and Apple’s fierce competition with Samsung means that green issues have now formed a key part of the rivalry. During 2014 Apple made a number of changes that took it from a sustainability laggard to a leader, including audits of supplier facilities, improving the energy efficiency of its buildings, reducing aluminum and steel usage and removing hazardous toxins from its products.

These cases show that progress on sustainability can be made at both firm and industry level, and that the assurance

of sustainability can protect brand equity.

In conclusion, the focus on sustainable luxury is a positive development which shows growing ethical maturity within the corporate world. A new class of green luxury has emerged and it looks like it’s here to stay. As well as business leaders; educators, consumers and investors also have an essential role in this process of attitude change. As an educator, I recognise the importance of universities in this intellectual revolution. The University of Sharjah appointed the UAE’s first Professor of Luxury Management in 2012. Since that date other universities have followed and there is a growing academic field providing teaching and research on luxury management. In the long run, however, the test of my success as an educator is when business leaders start talking about sustainability more, when investors start asking questions about the products that they invest in, and when consumers start challenging the companies that they buy from. Only then can we be sure that the muchneeded revolution in luxury sustainability is taking place.

ISSUE THIRTY FOUR - JANUARY - MARCH 2016

p48-49_Luxury.indd 49

49

2/17/16 11:22 AM

HNWI CHAT

SITTING DOWN with a HNWI ALANDE MUSTAFA SAFI, MANAGING DIRECTOR, PARAGON BUSINESS GROUP, SAT DOWN FOR A CHAT ON SOME OF HIS FAVOURITE THINGS

What car do you like best?

1988 Mercedes Benz Saloon 600. For me, this car holds sentimental value.

Where do you prefer to travel for pleasure?

When I am with my family and loved ones on an oceanfront beach house, I am content.

What's your favourite restaurant in the world?

The Palm, inside Caesar’s Palace, Las Vegas. Every time I am in the US I make sure I visit the restaurant.

What are your hobbies?

I enjoy reading political history of the world and human civilisation. I am an Afghan-Australian born in Afghanistan and with its political history, it is natural to be interested in politics, especially after being raised in a political family, so I made this my hobby.

It's also easy for me to carry my hobby whilst I am traveling for work around the world so frequently.

My other hobby is listening to music of all genres, especially Ghazals and Sufi Qawali from Southeast Asia region.

I can also add as a hobby that when I have lots of email to attend to, I pretend that I am playing strategy games on my iPhone, when in reality I am structuring my emails! This method works best for my long and serious emails.

50

p50_HNWI chat.indd 50

What watch or accessory do you love most?

I have this ring I wear that was made in Afghanistan. The stone is a Feroza from Panjshir Valley, Afghanistan. The historical myth behind it is, the person that wears this ring will only get two possibilities: the best of luck or the worst of luck. Let's just say I have had it over four years and I wear it every day.

What's your favourite suit?

It's my wedding suit, a Pal Zaleri purchased from Harrolds on Collins Street, Melbourne, Australia back in 2007. After all this time, it remains my favourite.

What's your personal life philosophy?

My life philosophy is complicated, but I will make it short: being born as a human is the biggest gift of our journey in the universe.

All material achievements are appreciated, yet my cause is to leave behind a legacy in which my name, efforts, hard work and business achievements will live on and serve the human race for the better far beyond my existence.

WWW.WEALTHARABIA.NET

2/17/16 11:24 AM

PARAGON PREMIUM INVESTMENT FUND

WORK FOR TODAY Let us secure tomorrow

The Future of Your Investment is in Australia Office 1, Level 2, 1091 Stud Road Rowville VIC 3178, Australia

Alande Mustafa Safi CHAIRMAN Paragon Premium Investment Fund Pty. Ltd.

PO Box 2127 Rowville, VIC 3178, Australia

alandesafi@paragonbg.com +613 9759 9037

p50_HNWI chat.indd 51

Melbourne +61402 755 582 Dubai + 971562 744 616 Jakarta + 81210678846 Shanghai +8613916036829

2/8/16 5:17 PM

RR_Wraigh_SOUND ELEMENTS_Amend2