#37 - October 2016 by CPI Financial

Cover Issue 37.indd 1

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exploring

a new world of possibilities

Global Investment Bank Limited (GIBL) is a company limited by shares incorporated in the Dubai Internaaonal Financial Centre (DIFC) and is regulated by the Dubai Financial Services Authority (DFSA). GIBL only provides services to Professional Clients and Market Counter-Parres as deďŹ ned d by the DFSA.

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CONTENTS

Editor's

LETTER

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

Greetings, all Welcome to the 37th issue of WEALTH Arabia. I hope you enjoy what is certainly our finest issue yet. The WEALTH Arabia Summit 2016 is almost here! Or, depending on when you’re reading this, it’s already been deemed a great success (knock on wood). Or you’re currently sitting in the audience, reading this now. If that’s the case, please put this down, ask a question and say hello—we’d love to include you in the conversation. Alright, you’ve waited until the Summit has ended? Great, there’s tons to dig into here. On the investment front, we’re in incredibly interesting times. Where should you be looking? Read through our investment section on pages 14-19 for plenty of great insight from a few of the world’s top investment minds. If you’re looking for more lifestyle content—this issue has some of our best features yet. First, a conversation with a man named Will Smith. Heard of him? If you want to know where you might run into him on your next holiday, turn to page 40. And if movies aren’t your thing—perhaps you’re more of a gearhead? In which case, I don’t need to tell you that you absolutely must hear how my drive on the F1 circuit with Top Gear’s Chris Harris went. Flip over to page 30, pronto. Till next time,

William Mullally

OPINION

The end of the beginning

NEWS & ANALYSIS

The latest analysis from the investment world

COVER INTERVIEW

A bridge to Luxembourg Patrick Casters, CEO, BIL

INVESTMENT

14 16 18 20

Top five trends to watch for in Q4 Chasing real value

Bonds are for capital gains, equities are for income

Fund profile: Paragon Premiere Investment Fund

PRIVATE BANKING

Mashreq

WEALTH MANAGEMENT

06 26

Jersey Finance Wealth’s tech future

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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CONTENTS

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

PROPERTY

London maintains attractiveness

MOTORING

30 36 40

Drifting the Abu Dhabi F1 circuit in top gear

We’re all mad here

LUXURY PRODUCTS

46 48

Polo’s next bestseller Montegrappa

LUXURY RESTAURANTS

50 54

Top British export

HNWI CHAT Sitting down with a jetsetter

EDITORIAL editorial@cpifinancial.net

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

EDITORS SARAH OWERMOHLE sarah@cpifinancial.net Tel: +971 4 375 2527

GOOD TALK

LUXURY RESIDENCES

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

Editor, WEALTH Arabia WILLIAM MULLALLY William@cpifinancial.net Tel: +971 4 391 3718

That classic charm

Will Smith: the pursuit of happiness

Chairman SALEH AL AKRABI

JESSICA COMBES jessica@cpifinancial.net Tel: +971 4 364 2024 NABILAH ANNUAR nabilah.annuar@ cpifinancial.net +971 4 391 3718

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 CONTRACT mohamed@cpifinancial.net Tel: +971 4 391 5320 PUBLISHING EDITOR SARAH SPENDIFF NAPOLEON sarah.spendiff@ ESTAMPADOR cpifinancial.net Tel: +971 4 3913729 napoleon@cpifinancial.net Tel: +971 4 391 4680 Contributors Tom Paye Head of Contract Hans Goetti Publishing & Business Hussein Al Sayed Development VINOD THANGOOR vinod@cpifinancial.net Chief Designer +971 4 391 3725 BUENAVENTURA R. JALUAG, JR. London Bureau jun@cpifinancial.net ISLA MACFARLANE isla@cpifinancial.net Tel: +44 7857 429476 Senior Designer FLORANTE MAGSAKAY Finance Manager florante@cpifinancial.net SHAIS MEMON, ACCA, CMA Creative Designer Shais.memon@ ANA MAKSIĆ cpifinancial.net ana@cpifinancial.net Tel: +971 4 391 3727 Online Editor MATT AMLÔT matt@cpifinancial.net Tel: +971 4 391 3716

Data Analyst NADINE ABOUZEID nadine@cpifinancial.net

Administration & Online Content Manager Subscriptions SIYA PAINAYIL enquiries@cpifinancial.net siya@cpifinancial.net Tel: +971 4 391 4682 Tel: +971 4 391 3722 Tel: +971 4 391 3709

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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

A BRIDGE TO LUXEMBOURG

WEALTH WARNING! A bridge to Luxembourg

TAPPING THE EUROPEAN MARKET WITH PATRICK CASTERS, CEO, BANQUE INTERNATIONALE À LUXEMBOURG DUBAI

A CPI Financial Publication

MOTORING RACING WITH BBC'S TOP GEAR

INVESTMENT IS SAFETY OVERPRICED? 16

LUXURY PRODUCTS BESPOKE HEIRLOOMS FROM MONTEGRAPPA 48

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.

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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.

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OPINION

THE END OF THE BEGINNING E

very time I sit down with the world’s top investment minds, fund managers, and economists, before I find out what they think, I have to ask one thing as soon as we sit down: “what have investors been asking you lately?” This isn’t, of course, the best way to find out the questions investors should be asking, but it’s important, nonetheless. Sometimes it might be a surprise—not this time though. It’s impossible to hold a conversation in basically any room without uttering the man’s name, as hard as that might be: Trump. The Trump situation is on everyone’s mind. I’m writing this in late October, and at press time, things have started to calm down. Unless a band of time travelling hunters go back and time, venture off the path, and accidentally step on a butterfly, (and depending on when you’re reading this, they might have,) it looks like Hillary Clinton is headed towards a win. So, if American voters keep Trump out of the White House, investors can rest

easy, right? Well, as Ralph Fiennes said so eloquently in Hail Ceasar!, would that it were so simple. Just recently, I had coffee with Steen Jakobsen, Chief Economist, Saxo Bank, and we both agreed that Trump may falter, but what caused Trump’s rise isn’t going away. The nationalistic sentiment that has popped up in the US, UK, and all around the world isn’t going away. And, like it or not, those movements are going to affect the world’s economy. Of course, if the Fed ends up raising interest rates this year, and if Hillary’s tax increases to into effect, we may be, as Jakobsen suggested to me, be headed towards a recession. If that does happen, there are many reasons why that may not be such a bad thing, and may help to sort out some of the political volatility and confusion about the world’s path discussed above. Why is that? Well, let’s get into that more in the next issue…

William Mullally ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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Jersey connects with the

With a strong and growing presence in the region, Jersey is increasingly providing a range of private wealth management services to GCC clients

GCC This is an exciting time for Jersey and its relationship with the GCC. Jersey Finance not only returned to Dubai earlier this year with its popular annual roadshow event, this time it spread the word further by bringing a complementary roadshow to Doha. These events, which attracted a broad cross-section of the GCC advisory community, were united by a single heading: Clear Direction. It was an apt title, as it not only reflects Jersey’s burgeoning relationship with, but also its commitment to the region. For more than 10 years, Jersey Finance, Jersey’s government and the Island’s regulator, the Jersey Financial Services Commission, have been making regular visits to the GCC. Having established a presence in the UAE in 2011, Jersey Finance’s Dubai office has fostered a strong and growing relationship with the business community in the region, with an advisory group of senior finance and legal professionals on the ground helping those links become even tighter. The region is, of course, experiencing some changes, and this is affecting what its businesses, wealthy individuals and families demand from financial services providers. In its Global Wealth report (published in 2015), the Boston Consulting Group estimated that private wealth in the Middle East and Africa stood at US$8 trillion in 2014, and will reach an estimated $13 trillion in 2019, with Saudi Arabia ($2 trillion) and the UAE ($1 trillion) among the largest markets.

control their assets, and a solid reputation for helping people spread their investment risk around the world. Investors realise that Jersey measures well against this criteria. The Island has more than 50 years’ expertise in delivering private wealth management, trusts and estate and succession planning, and it’s a secure jurisdiction. Jersey sits in a stable corner of the world and benefits from a unique constitutional position and allegiance to the English Crown, which dates back to 1204. As well as having independence over its affairs, with an elected parliament and its own financial drivers, Jersey also has a long-standing partnership with the City of London. This can be crucial for GCC families seeking to use London as a home or location for investment. Jersey’s private wealth management provision is based upon the range of structures it offers investors. The Island built its reputation on the establishment of trusts and private companies (it now has more than 900 regulated trust company businesses, for example), but more recently its innovative Jersey foundations and private trust companies have proven increasingly popular too, especially among those seeking greater control over their assets. In addition to this, Jersey has been providing family office services for decades, something that chimes in a region where family wealth and business are paramount, and are anticipated to grow in the coming years.

Families are getting bigger, interests are becoming more complex and international, and the volatile geopolitical landscape – with everything from the Arab Spring to ongoing turmoil in Syria, Libya and Iraq – means wealth planning needs to be more robust than ever to safeguard assets for future generations.

Perhaps most crucial of all, Jersey’s expertise extends to Islamic finance. The Island’s legal system hasn’t had to change in any way in order to accommodate Sharia-compliant products, and it’s flexible enough to handle the nuanced needs of the various schools of Islam.

Families and businesses in the GCC are therefore looking for a few key elements from their partners: a flexible approach to wealth management, with a good understanding of how the region’s wealthy individuals want to run succession planning and

This diversity of work enables Jersey’s practitioners to respond rapidly to emerging new trends, such as the growing demand for real estate investment in UK property and the increasing focus amongst investors for philanthropic products.

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KUWAIT

BAHRAIN

QATAR

UNITED ARAB EMIRATES

KINGDOM OF SAUDI ARABIA

These days, any jurisdiction looking to remain at the forefront of financial services has to act in lock-step with global transparency standards, due diligence and anti-money-laundering measures. Not only does Jersey offer a robust yet flexible, modern and sophisticated legal framework, it was also an early adopter of the OECD’s Common Reporting Standard and is fully signed up to the US Foreign Account Tax Compliance Act (FATCA). On top of this, the Island has received glowing endorsements from the OECD, World Bank and IMF. Indeed, Jersey has managed to strike the difficult balance between transparency and confidentiality, something that is of huge appeal to investors in the Middle East as this web of tax reporting initiatives becomes the global norm. Jersey’s finance offering sits at the forefront of global banking, wealth management and corporate services, balancing product innovation with an enduring strength as a centre for Islamic finance, high standards of regulation, world class legislation and vast expertise from a range of seasoned professionals. As such, the Island is perfectly placed to support the complex estate planning and investment ambitions of GCC investors, as they respond to the rapidly changing global financial picture.

Geoff Cook

Chief Executive, Jersey Finance Limited

linkedin.com/company /jersey-finance

@jerseyfinance

jerseyfinance.je

OMAN

Jersey: 10 key strengths + + + + + + + + + + +

50 years’ experience in private wealth management Deep ties to the GCC Early adopter to the latest transparency standards Glowing recommendations from the OECD, World Bank, IMF and MONEYVAL A substantial network of top-level financial services professionals An enviable community of support services, from legal to accounting Innovative products – from trusts to Foundations, Private Trust Companies and family offices Expertise in Islamic finance Stable location Close ties to London and European markets The perfect blend of the transparent and the confidential

youtube.com/jerseyfinance

vimeo.com/jerseyfinance

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NEWS & ANALYSIS

C Josef Stadler, Head Global Ultra High Net Worth, UBS

yprus recently introduced key revisions to its citizenship-by-investment programme framework, including altering the required minimum investment value, the investment requirements and the increased benefits for investors.

Bata Racic, Manager of Henley & Partners in the Middle East

hile Asia accounted for half of 2015’s new billionaires, new research from UBS Group AG and PwC found that Europe has the most multigenerational billionaires—a feat of wealth preservation.

Led by a tech sector on the rise, China minted 80 new billionaires in 2015 and Asia overall created a new billionaire nearly every three days. Meanwhile Europe's billionaires stood out for maintaining and passing wealth down to their heirs. This is something that regions like Asia, where many more billionaires are first generation, can learn a lot from, especially as we head into the greatest period of wealth transfer we’ve ever seen. Just as Asian billionaires can gain from the experience of wealth transfer in Europe, there’s much that Europe can learn from the rapid billionaire growth in Asia.”

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Cyprus continues to be one of the leading citizenship-by-investment programmes in the world. We see very high demand for Cypriot citizenship from the MENA region, in fact, the Cyprus programme saw over a 100 per cent increase in demand in 2015. Following the recent changes, we expect to see even further increases in regional demand from HNWIs, investors and entrepreneurs.”

51668

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PHOTOS: FLORANTE MAGSAKAY

PATRICK CASTERS, CEO, BIL DUBAI

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COVER INTERVIEW

A bridge to Luxembourg BANQUE INTERNATIONALE À LUXEMBOURG’S 160 YEARS OF WEALTH MANAGEMENT EXPERIENCE CAN HELP GCC HNWIS TAP THE EUROPEAN MARKET AND MORE, SAYS PATRICK CASTERS, CEO, BIL DUBAI

Congratulations on your appointment as CEO of Banque Internationale à Luxembourg (BIL) Dubai!

I’m very excited about being here. It’s my first permanent posting to Dubai, and so I’m looking forward to contributing to building something up from where we stand today. BIL has large ambitions for the Middle East, and Dubai is central to the strategy for one of the bank’s core markets for the coming years.

Could you tell me more about what BIL Dubai offers?

We are a European bank offering a full range of banking services, including digital banking. We offer services to GCC nationals, expats and European nationals living within the GCC in relation to their investments in Europe. We are also working on developing a non-resident Indian platform within Dubai in order to have another client type.

We are also working on covering certain institutional clients in this market, in conjunction with our staff based in Luxembourg.

What was your experience before coming to Dubai?

I most recently headed the International Wealth Management department with a special focus on ultra-high net worth individuals. We have set-up a specific offering aimed at these clients, focusing on VIP services and adapting our product and service model in line with our clientele’s needs. We switched from the traditional banking side, where we tried to develop products and manage assets, towards developing many more services for our clients in order to help them manage their wealth over the long term and through the generations. ...cont. overleaf

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COVER INTERVIEW cont. from page 11

PATRICK CASTERS, CEO, BIL DUBAI

Do you change to meet their needs or to anticipate their needs?

I think we always have to anticipate. And in order to do so, we meet with clients, discuss with family offices, and try to figure out in which direction they would like to go. Every family has its own strategy—it’s all individual. I think, for a bank, it’s important to analyse and figure out what direction it must take in order to serve its clients. Families will always retain an important stake in local business, but, as with all private individuals, they also seek to protect and develop their wealth. They want to diversify across geographies and asset classes. We as a bank must listen to those clients and help them on the financial side in order to meet that part that is covered fully by liquid assets.

What needs are you anticipating going forward?

I think it will still be necessary in the future to have your wealth in liquid financial assets, but on top of that, we are working across other asset classes, focusing on the search for yields and the search for security.

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There’s a search for pickup and leverage. Asset classes like real estate, private equity and direct investments into projects are becoming more and more important to the UHNWI community.

How have high net worth individuals in the region changed since the early 2000s?

The difference today is clearly that investors have become more sophisticated. They are increasingly interested in looking for external investments, going to the US to invest in real estate or going to the UK or France. At one time, it was rare to find investors who made the decision to invest outside the GCC. Back then, investors were more focused on their local markets, as the yields were extremely high, but since the financial crisis this has changed, and pushed investors to look for investments outside of the GCC. This was of course strengthened by the instability in the region.

Do you find the HNWIs here are accepting that they can’t get the yields they once did, or are they so

used to getting high yields that they expect them? How do you manage the risk involved with that expectation?

By now, most investors have accepted that the yields are lower than what they were getting a couple of years ago, given the environment of IPOs, booming real estate investments and extremely high yields. Postcrisis, they are of course looking for high yields, but they accept that today the market has changed. Outside of the GCC, depending on where you invest, investors have also accepted that those markets are lower, too. Yields on real estate investments in the UK are at historically low levels, yields in France are not very high either. Investors have accepted that yields in those markets are lower than they used to be. It’s a tricky environment to navigate.

Tell me more about your customer base in the region.

In the region, we are concentrating mainly on the UAE, which is a crucial market for us. In terms of demographics, our customers

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Every family has its own strategy—it’s all individual. I think, for a bank, it’s important to analyse and figure out what direction it must take in order to serve its clients.

are from many different countries, but our main focus is on UAE nationals and UAE residents.

developing the brand in order to show that our local office is able to do things that you would only expect from an overseas bank.

Why do UAE nationals want to work with BIL? What attracts them?

Are there any products in your portfolio that UAE investors are under-utilising, in your view?

What attracts them is we’re different from the others. We’re the only Luxembourg institution based in the Middle East. We’re the oldest bank in Luxembourg, with a 160– year history. We have a strong balance sheet, good equity, a good rating, and we offer a very nice platform of services and products. On the execution side, we’re extremely good. The history and experience we have in international markets goes back a very long time. On the other hand, being based in Europe, we have always been a bank that looks across Luxembourg’s borders. We deal with all the major countries in Europe, and can help with the set-up of structures in order to help clients invest in Europe from Luxembourg, which is very popular with our client base. As an AAA-rated country with very strong regulation, Luxembourg today offers the ideal platform for investors seeking to invest into the European market.

How are you looking to get more people working with you in the region?

We have to deliver on what we have promised our clients. We have to be responsive, proactive, and close to our clients. That’s why we’re based over here—we want to be close to our clients and respond to them quickly. Our bank today lacks a strong brand recognition in the region, so we are

One typical product is real estate in Luxembourg. That’s not usually something that Middle East investors might think of immediately—they might think of London, France or Germany first. But Luxembourg is a very interesting and solid real estate market with decent yields, good quality buildings and reliable tenants. It’s an interesting opportunity for Gulf investors.

How do you see the European market in general for investors?

It’s often said that Europe is overpriced. I’m not convinced. I think that Europe has a solid real estate market. The economy is suffering like all economies the world over, but there are signs that it will pick up. You won’t get yields at four or five per cent, but the attractiveness of Europe will always be there. People will always go to Europe. This will be the case even if the yields aren’t as strong as you might find in Southeast Asia. I think the wise investment is to diversify, and have part invested in high yield markets and part in a solid market such as Europe.

What do you expect private banking and wealth management to look like in 10 years? With all of the regulatory changes that have come and will come we will move

into an increasingly transparent banking environment. Private banking in the future will be about trust and delivering services, products and yields. But it will also be about innovation. That is important, for me. Traditional banking will remain, but we will have to constantly innovate in order to stay ahead of the competition. There will probably be consolidations in the future, since banks are suffering due to pressure on margins and increasing costs. The push towards a more transparent, innovative platform will be important within the years to come. In the end, we have to be open to future client needs and adapt our product and service model permanently. People’s expertise and training is essential to being ahead of the competition.

What are you personally looking to bring to operations in Dubai?

What I first want to bring to Dubai is a personal presence. I want to spend time with my staff and meet with clients. I want to propose solutions and give our staff motivation. I would like to make my long experience available to the people in Dubai, and I’m sure that after having spent the majority of my time in Europe, I can bring this expertise to Dubai, but at the same time bring the wisdom and insight that is offered by Dubai back to the head office. We would like to be recognised as a leader in private banking in this market within the next ten years, and that is what I am working towards.

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INVESTMENT

Top five trading trends to watch for in Q4

HUSSEIN SAYED, CHIEF MARKET STRATEGIST, FXTM, BREAKS IT DOWN

confusion over the US interest rate outlook may have led to investors reframing this perception. If US interest rates stay low, the argument can be made that demand for emerging currencies will remain a key trading trend.

3. Demand for Gold

As long as global economic uncertainty remains in play, Gold is the asset of choice, gaining each time there is a market shock like the Brexit. Gold may see more demand as the full consequences of the UK exiting its European Union membership continue to play out.

4. Weaker GBP HUSSEIN SAYED

s we move further into the fourth quarter, the trading markets are in a period of unusual volatility, with most asset classes from bonds to commodities showing unpredictable price action. Uncertainty shocks are arising from the most unexpected places, a recent example being the Brexit crisis in the UK. If global growth remains in doubt and mature economies keep struggling, uncertainty shocks could prevail over the short-term trading future, leading to five major trends.

1. Overheated stock prices

US stocks are trading at relative highs, even though earnings have been receding for five consecutive quarters.

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At the same time, easier borrowing at low interest rates for stock market investors is buoying equities. This could mean a stock market bubble. If investors are paying over the odds for stocks that are under-performing, at the next shortselling frenzy they may be left high and dry.

2. A return to emerging market currencies

Emerging currencies are usually judged to be too volatile and opaque for comfort, but an uncertain external environment that has included low returns in mature economies; an unexpected EU referendum outcome; continual depression in the price of oil and ongoing

The Bank of England may trigger an even weaker GBP if it moves to drops interest rates again over Brexit concerns, meaning that cable crosses will continue to be a trading focus.

5. Oil recovery bets

The oversupply in the crude oil markets hasnâ&#x20AC;&#x2122;t gone away overnight, despite the fitful price rises in WTI and Brent driven by speculation over the OPEC deal to cut production. The 15 per cent surge in oil prices since the Algeria meeting was based on speculation that a deal could be reached, suggesting that a cut in production is already priced in. If this isnâ&#x20AC;&#x2122;t converted into actions at the next meeting on November 30th, then a sharp fall could be seen. For more information, please visit: ForexTime.com

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PHOTO:SHUTTERSTOCK

INVESTORS MIGHT HAVE TO VENTURE OVERSEAS FOR SOLID RETURNS.

Chasing real value

WITH ‘SAFE’ CHOICES OVERPRICED, INVESTORS NEED TO LOOK INCREASINGLY AT MARKETS AND ASSET CLASSES IN WHICH THEY ARE BEING PAID TO TAKE RISK, ACCORDING TO NORMAN VILLAMIN, CHIEF INVESTMENT OFFICER (CIO) PRIVATE BANKING, UBP 16

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ar from the smooth sailing of 20 years ago, retail investors today are in much trickier waters to navigate. Whereas building an investment portfolio with relatively low risk and strong growth was relatively simple in the 1990s, today’s investors are faced with much tougher choices. “Twenty years ago, if you wanted to generate a 7.5 per cent return on investment, what do you think you would need to buy? You could buy vanilla investment-grade bonds, with relatively low risk,” said Norman Villamin, Chief Investment Officer (CIO) Private Banking, UBP. “ If you were to roll forward ten years and still wanted 7,5 per cent, you could take half your money in bonds, and the rest in equity. You got the same return, but you would increase your risk

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WEALTH MANAGEMENT

by 50 per cent. In 2015, if you wanted 7.5 per cent, you can do 10 per cent of your portfolio in investment-grade bonds, but the rest in equity. You can get that same 7.5 per cent, but you’d have to triple your risk from 20 years ago.” As a result, investors in today’s climate, especially those that started their portfolio’s back in a less volatile investment climate, have been rushing towards low-risk. “Everyone has said that they think it is very risky out there, so they would rather be safe,” said Villamin. “They then go to things such as dividends, which people like because they get their money and feel its safe. As a result, high dividend strategies have been very popular for a number of investors. Next, people look for safety in consumer staples, as they feel that demand will always be there.”

When everyone is looking for safety, it is likely the wrong time to be chasing safety, according to Villamin. “The problem is the valuation gap between what we call low volatility names, and the high volatility names, such as industrials and banks, that are more risky. The valuation gap between the two of those has opened up and is very wide. How wide? The last time we saw the valuation gap this wide was in 2002-2003.” Villamin elucidated exactly why that comparison is so troubling. “If you remember what those times were like, it was right after the bursting of the tech bubble in 2000-2001, and investors wanted nothing to do with tech, and, as a result, went heavily towards the safe stuff—healthcare, consumer staples, dividends. That was exactly the wrong time to buy that safety because you were overpaying for that perceived safety. We’re in a similar situation right now. Everyone is pursuing safety to the point where they’re overpaying for safety. In certain markets that are paying you to take the perceived extra risks, there is value there. Where you are not being paid to take that risk, it’s better to take what the market is giving you and look for the deeper value stories.” Where are the deeper value stories? One place that Villamin highlights is in emerging markets. “For us, the real story is in East Asia. The Chinese have had their growth moves from 9–10 per cent to six per cent, and we will get cyclicality around that, but that should be the trend going forward. In India, which had been fighting inflation due to the devaluing of the Rupee, inflation has started to roll over and will allow a nice interest rate cycle to most likely take hold. “ US growth too should have a positive effect on East Asia. “The US is starting to reaccelerate, which should start to increase overall demand from these markets, which should increase earnings. We think the backdrop really favours East Asia both from a valuation perspective, as you are basically buying things at a 30 per cent discount from comparable companies in the developed world.

We also have cyclical tailwind whereas from 2012-2014 we had a headwind, which caused inflation to come up in those years, but now the valuation gap has started to close and move forward. The three markets we are most focused on are China, India, and South Korea.” That doesn’t mean, however, that there isn’t risk to be had in those markets. “Just because it says bond, doesn’t mean you’re not taking risk. If you are buying a Chinese real estate company bond, there is a chance you’re not going to get your money back. And on the flipside, just because it says equity, doesn’t mean that it’s volatile. There are some equities that are quite safe and steady.” Not all investors, however, are willing to invest in markets in which they aren’t familiar. And investors that do want to get into new markets to chase higher returns should research heavily before doing so. “At the end of the day, investors are going to want to know the names that they are buying. If you’re buying something you know it has a tangible feeling to it, but if you’re buying a telecom company in a country you’ve never heard of, you do not have a feel, at least in your own mind, whether the business is doing well or not. Familiarity gives investors a sense of comfort, and one thing that investors need to do is be comfortable with the things they own. We all talk about doing due diligence, but at the end of the day, if you do not understand what you bought and the risks of it, you’ve got to ask, and if you aren’t feeling comfortable, it’s probably something you need to rethink.” But investors shouldn’t trust solely in their old reliables—the US equities market could be headed towards a correction. “If you look at the equity market, US equities are trading, give or take, at about 20 times earnings. If you look at the last 50 years, they’ve only traded more than 20 times earnings five times before this. It’s only in emerging market equities that we really see some value. In our view, it’s not about valuation, it’s about looking across the asset classes and asking ourselves, where are markets paying us to take risk that are not that well priced?”

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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INVESTMENT

Bonds are for capital gains, equities are for income WITH BOND YIELDS NEAR ZERO PER CENT, ITâ&#x20AC;&#x2122;S TIME FOR OLDER INVESTORS TO THINK ABOUT A NEW STRATEGY WRITES HANS GOETTI, CHIEF STRATEGIST MIDDLE EAST & ASIA, BANQUE INTERNATIONALE A LUXEMBOURG

ooking at the long-term trend in asset prices there are many factors at play. During the last few years the most important one has been the role of central banks which was characterised by continued meddling and interventions in the pricing of assets ranging from bonds, to equities, to real estate, to precious metals. The other very important determinant of asset prices has to do with demographics, particularly to role of baby boomers as workers, savers and investors. The first of the baby boomers (those born between 1946 and 1964) turn 70 this year. For the next decade there will be 1.5 million people turning 70 each

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year which will bring the share of the population in the US above 70 years of age from 10 per cent today to 15 per cent. The challenge is that this age group does not have sufficient savings which would enable them to retire. As a consequence they continue working, which is evidenced by the fact that employment growth in the age cohort over 65 is close to seven per cent year-on-year, faster than any other age group. Instead of riding into the sunset or going on cruises they will continue working, simply because they need the cash flow. Moreover, life expectancy has increased significantly. This means that ageing baby boomers will continue to build their savings

base in the next few years, rather than drawing down their assets. Given their age, capital preservation will become even more important. In the past, bonds were the instrument of choice to achieve this objective. The problem is that today bond yields globally are between tiny and non-existent. In a world where about 30 per cent of the worldâ&#x20AC;&#x2122;s sovereign bonds trade at yields below zero per cent, and nearly 80 per cent below one per cent, equities remain one of the few alternatives despite their sky-high valuations. This is illustrated by the fact that for the first time the 30-year US Treasury bond yield is actually lower than the S&P 500 dividend yield.

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In the past year, 75 per cent of the total return in bonds has come from capital gains, and just 25 per cent from the yield. On the other hand, in equities, over 50 per cent of the total return has come from re-invested dividends. The baby boomers are in need of income at a time when central banks have made bonds a scarce commodity and have pushed prices into the stratosphere. This age cohort is, therefore, forced to turn to equities as an alternative to bonds. Despite their powerful bull market, equities have lagged bonds for the past 16 years, and it can be argued that despite their historically high valuations they still have a lot of catching up to do on a relative basis.

Ironically, investors are finding themselves in a situation these days where bonds are for capital gains and equities are for income. All thanks to years of central bank meddling and price manipulations. Despite these distortions, the central banksâ&#x20AC;&#x2122; experiments are far from over and it becomes evident that policy normalisation remains a huge challenge with the Federal Reserve coming closest, although even they are finding it difficult to achieve this goal. After their December 2015 rate hike created havoc in financial markets in the early part of this year, the Fed has refrained from further tightening.

While the probability of another move this year has increased we can safely assume that further interest rate hikes will be gradual and very data dependent. Given the structural headwinds in the global economy we foresee interest rates to remain lower for longer, perhaps much longer. This means savers will find it challenging to generate income and the chase for yield will continue. At the same time, savers around the world will have to rethink their age old income generating strategies and start to realise that in this new environment bonds are for capital gains and equities are for income.

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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PHOTO:SHUTTERSTOCK/ALEXSKOPJE

WHAT ARE BONDS FOR THESE DAYS, ANYWAYS?

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FUND PROFILE

SPOTLIGHT

The Paragon Premier Investment Fund

A CLOSER LOOK AT PARAGON PREMIER INVESTMENTS’ SUCCESSFUL FUND “Our concern is at all times that your investment is protected and therefore we only invest in quality Australian real estate and secured mortgages. The investments are selected first and foremost maintaining the security of your investment. – Alande Safi, Managing Director, Paragon Business Group

By investing with the Paragon Premier Investment Fund, investors receive the following benefits: unds are managed by professionals with expertise in managed investments. F Investment is selected to ensure protection of investment monies. The expected investment term will be three to five years but you must commit to a minimum investment term of three years. Investors will receive an attractive annual investment return from the time we receive money into the Fund. Investors will receive quarterly performance reports for Fund investment.

TYPE OF INVESTMENT

MAXIMUM INVESTMENT

Specific investment interest (Sub Fund) in an Australian domiciled real estate or mortgage investment selected by Paragon Premier Investments Pty Ltd. investment is an interest in that SubFund that holds the property and/ or mortgage investment. Investors will receive a Certificate of Investment denoting amount of investment and the Sub Fund where investors’ monies have been invested.

Unlimited

INVESTMENT PRODUCTS

The expected investment term will be three to five years but a minimum of three years from the date of receipt of investment monies in full.

Australian based real estate or mortgage investments.

INVESTMENT SUITABILITY Any person including high net worth individuals (HNWI) and entities may invest: • HNW Individuals • Companies • Self-managed Superannuation Funds • Trustees • Institutions • Charities and Foundations • Overseas investors

MINIMUM INVESTMENT $1,000,000 unless varied by Paragon Premier Investments Pty Ltd.

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FEES CHARGED TO INVESTORS Nil entry and exit fees management and other fees

TERM OF INVESTMENT

INVESTMENT RETURNS Minimum six per cent per annum return unless agreed otherwise

WITHDRAWAL OF INVESTMENT Investors will not normally be able to withdraw investors’ monies until the investment term is completed. Investors should consider an investment in the Fund to be illiquid. Investors have the opportunity to rollover into another investment at the end of the investment term or otherwise have investors’ investment monies returned to investors.

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PRIVATE BANKING

Universal appeal MASHREQ GOLD SUCCEEDS BY OFFERING LOCAL EXPERTISE AND UNIVERSAL PRODUCT OFFERINGS FOR ITS AFFLUENT CLIENT BASE, SAYS RAJESH MALKANI, HEAD OF PRIVATE BANKING AND WEALTH MANAGEMENT

What have been the key changes since you came on board? One of the key changes is that we have brought the management of the Private Bank & Mashreq Gold (which is our affluent client offering) under one umbrella, that of combined wealth management. From a client perspective, we still maintain the two segments. The merger of resources benefits both segments through enhanced product offering and combined process improvements & investments in technology.

RAJESH MALKANI

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Tell me about your client base. We are a UAE bank and have a heritage of 50 years in the region, which, I believe, makes us the oldest local bank. We have a mix of clients, with a large number of UAE nationals & residents, as well as a number of non-residents, mainly from Europe & the rest of the GCC. Our clients are typically large business owners. There are also professionals & senior executives of medium to large-size corporations. Resident and non-resident clients have different needs. While they both require wealth generation or wealth preservation

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and estate planning solutions, it is clear to us that UAE nationals and the long-term residents have a bigger share of their wealth in real estate both here and abroad. What separates you from the competition? I think what clearly differentiates us from other banks that operate in the wealth management space is two things. First & foremost, we are a universal bank, and are able to serve clients beyond just their wealth management needs. We offer retail, SME & corporate banking. We have an asset management company and a capital markets business as well, and therefore we can serve all of our clients’ personal and corporate banking needs. Secondly, our expertise and risk appetite for local-market investments is a big differentiator. How do you categorise your clients? Apart from demographic segmentation based on nationality or residence, clients are categorised based on their risk profiles. Their risk profile is a function of their net worth, knowledge and experience in various investments, risk tolerance, investment timeframe, and Shari'ahcompliant requirements. Our advice, portfolios and products are tailored to meet these individual risk profiles. These profiles range from being conservative, and typically a conservative client will have mostly cash or very high grade bonds, to very aggressive where a client takes high investment risks like investing in emerging market equities, leveraged regional bonds, etc. We have a broad suite of solutions across asset classes and markets. We take a relationship approach to our clients. We advise not just on single securities but on a portfolio basis. We take a holistic approach with our clients, it’s not

just about what they hold with us, but what they hold with other institutions as well. Is there something different about the clients you meet here? Not really, having worked with clients in Asia, Africa and Middle East, within each of these markets there are clients that sit across the risk spectrum. The only real difference I see so far is the higher need for the Shari'ah-compliant investment products in this region. What I also see across the various markets is clients wanting to deal with a universal bank, a bank that is able to meet not just their wealth management needs, but also offer the convenience of daily banking products such as mortgages, credit cards, etc., all under one roof. The other common feature across markets is the rapid growth of digital banking. A good example is in the branches. We see fewer customers going to branches, and doing more through computers and mobile phones. Five years ago banks would talk about how many branches they have, as if that was a reflection of the size of the bank. Not anymore! I see a similar shift in the wealth management space. The technology exists, the innovation has happened. It’s now a function of clients adapting, accepting and adopting this change. This is something we’re going to see in the next two to three years. This is a big shift that I think will come in the wealth management space— more technology being used by clients for execution and even for research and advice. What are the challenges and opportunities in private banking in this market? I think the biggest challenge facing all is the difficult market environment. We are at a point in the interest rate cycle where interest rates are extremely low, they

have only one way to go and that is up. Clearly bonds are extremely expensive and vulnerable. On the other hand, equities, especially US equities, we are seeing new highs every day, and valuations that are stretched. Commodities are going through a very difficult patch. From an investment point of view, it is a difficult investment environment. Making sensible risk based investment decisions and managing return expectations is a challenge! The other broad challenge is the whole area around compliance. This isn’t just limited to anti-money laundering or tax compliance, but also client suitability. To ensure the products that clients are investing in are suitable based on their risk profile has to be a key area of concern. In terms of opportunity, there is a lot of liquidity in the system. Clients are sitting on a fair amount of cash, and when interest rates are as low as they are, clients look for alternative investments. Inflation is higher than interest rates, clients are looking for returns to at least match inflation and retain the value of their money. That creates an opportunity for wealth managers, as more money comes out of cash and goes into alternative investments, that’s an opportunity for the industry as a whole. So what is your focus going forward? We are very committed to the wealth management business. We have significant business in Dubai and have grown our Abu Dhabi business as well since it launched three years ago. We are soon going to launch a private banking business in Qatar. In Dubai, our flagship business, we are looking to double our business here in the next two to three years. We will continue to invest in people, products, systems, processes and training, we see wealth management as a key growth engine in our business.

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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10/25/16 1:42 PM

ADVERTORIAL

Alternative asset allocation into well-located land assets in the US

espite the instability and volatility permeating the global economy, cross-border direct real estate investments in major cities around the world is increasing, driven by emerging sources of capital looking to establish geographically diversified portfolios. The US has always been a prime target for global real estate investors, with close to US$80 billion injected into the US from different countries like Canada, China, Singapore and the UAE in 2015. With considerable amounts of capital entering the country and the US economy

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on an upward trajectory, investors are viewing the US real estate space as a viable and attractive proposition, with its strong economic fundamentals, reliable legal system and other structural advantages. INCREASING INTEREST IN US TIER-2 MARKETS It has long been the obvious preference for real estate investors to focus on gateway cities in the US where investors have been offered some perception of relative security since the days of the Great Recession. Nevertheless, the most obvious choice

does not necessarily reflect the most profitable properties. In recent years, the traditional gateway markets such as New York and Los Angeles have become so highly valued on a global perspective that property pricing has risen to levels that could make them less attractive to a typical investor. As a result, real estate investors are now casting wider nets as they look at US real estate markets in search of capital growth. A recent study conducted by the Urban Land Institute suggested that enthusiasm towards real estate investing is transitioning towards tier-2 markets, many of which now

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ADVERTORIAL

offer amenitized, urban, walkable, transitoriented development outside the centercity core that propounds a highly attractive value proposition. In order to understand the potential value of the land located in tier-2 markets, a thorough due diligence process is crucial to identify investment opportunities available in these locations. IDENTIFYING THE RIGHT LAND IN THE PATH OF GROWTH A top-down research methodology that begins with the macroeconomics of a Metropolitan Statistical Area (“MSA”) then the growth patterns of a target market area should be employed to evaluate a land’s potential. Conducting property due diligence helps to identify the right land before acquiring the asset, where land absorption is projected to take place and value of land is protected. Due diligence can be categorized into three sectors namely: Market and Housing Assessment, Land Information, and Zoning and Entitlements. Thorough reports and property assessments from local developers’ and home builders’ perspectives are collected to ensure all potential risks to development are mitigated. These procedures are lengthy, complex and require the aid of experts for tracts and entitlement processes to be completed. The gathered land and market research justify if a tract of raw land is worth acquiring to be turned into a fully functional and value-worthy neighborhood.

I Market and housing assessment It is essential to study an area’s economic and demographic factors influencing the housing market in order to project a land’s potential value. This not only allows investors to study where land is in demand, but also to predict its monetary value and possible developmental layout. Comparing neighboring housing developments with market and migration studies, suggests that many properties are worthy to invest in. Market and housing assessment provides the basic foundation, but is insufficient to deliver a full picture to reflect what investors could do with the subjected property’s physical and environmental characteristics. Such extended research must be conducted prior to one’s decision to invest. II Land information collection Background information about a property is important to understand its potential. This information can be obtained from various sources such as government notices, permits, licenses and restraints on land use. The land status may be retrieved through title association and insurance companies to assess whether a property holds a defective title. Encumbrances should be researched and listed out to avoid hidden costs, and the physical status of the property should be examined to identify all possible developable options and restrictions. These three areas of intelligence on the land

are all for the purpose to avoid investors' unnecessary financial loss through inaccurate asset selection. III Zoning & entitlement review Not only is extensive research important but also, the capability to be connected with local experts. Understanding of the local land use policies and regional growth plan is important in obtaining land zoning and development approval. Land policy reflects the decisions and actions of policymakers with regard to the use of land. Changes of land use policy may potentially affect the land planning and the future value of the land. The current status of the property, including existing zoning and potential density levels should be reviewed by experienced professionals in order to implement further land planning. Overall, choosing the right firm with solid experience and proven track record is essential. With over 35 years of experience in research, acquisition, administration, planning and development of strategically located land in major North American growth corridors, the Walton Group of Companies (Walton) is one of the leading land-based real estate investment and development groups in North America. Walton has over 103,000 acres of land under administration, 21 active development communities, and currently administers over $4.2 billion assets. Walton has more than 96,000 clients globally providing medium to long term land-based investment opportunities to qualified investors.

To learn more about Walton, please visit Walton.com

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10/24/16 4:56 PM

Wealth’s tech future

WEALTH ARABIA’S MATTHEW AMLÔT SAT DOWN WITH DIDER ABBATO, DIRECTOR, SAXOSELECT PROGRAMME AND CHRISTOPHER TRUCE, HEAD OF OPEN API, SAXO BANK What do you see as the future for wealth management? Dider Abbato: The way we see things going is the future is going to be relying more and more on technology. I think technology in the wealth management space is going to be more about giving access to better quality products, to a more mass market audience.

So it’s about lowering the barrier to entry to quality investment products, or quality wealth management. I think traditional wealth mangers are not necessarily going to be challenged in their core products, but they will be challenged more on the plain vanilla type of service they offer their clients.

There will still be a need for the tailor– made services which wealth managers already do these days, they offer these services to higher net worth clients. These clients will still need the personal touch, the personal service, a tailor–made service, that is not going away… The technology will help automate and facilitate some part of

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WEALTH MANAGEMENT

PHOTO: SHUTTERSTOCK/ JEREMY REDDINGTON

wealth management to the masses. It’s not going to be tailor made, it’s going to be a bit more standardised maybe. Of course there can be quite a lot of tailoring, but when you compare the needs of a HNWI to a mass affluent or someone lower than mass affluent they don’t have those needs because they don’t have so much money to play with. You just need the basics at a low cost. Basically the technology is bringing the costs down… For example, you go to your bank and you buy a mutual fund, there’s potentially a big cost embedded in that mutual fund. Thanks to technology that brings transparency we will basically be able to offer that same sort of product at a lower cost to the end user. That’s the two drivers of efficiency, the cost to the end client and the possibility to bring that service to a lower minimum investment. This helps us open that world to more people.

the service. But I think the core of it is about giving access to mass clients–the type of services they didn’t have access to before. So technology will help bring wealth management to the masses? DA: Yes exactly. That’s really what it is. The technology is facilitating bringing

Do you see wealth managers using more data to personalise customer experience and how? Christopher Truce: The only way you can reach that level of user experience of personalisation is with aggregated data. I mean data is the only way I could really evaluate a perfect user experience for you is if I had enough data about you. The only way I’m going to obtain enough data about you and be able to act on that data is via APIs, which is more starting to get into my world. And it’s not just to have an API, to trade and get a quote or to have an API that gets your personal data from the DMV or something like that. I’m talking about a way of taking access to APIs and aggregating it to be able to make sense for a user experience to you. I think the breadth of the services in the API is going to what is most attractive

to the digitally savvy wealth managers moving forward. Do you see the future of wealth management being in the hands of the large incumbents or the smaller, more nimble fintech start-ups? DA: I’m old enough to think back to the year 2000 and the rise of the internet and the bubble around then, I think what’s going to happen is there’ll be some new stuff that’ll be bringing new added value to the space, and then the incumbents will eventually integrate that and buy it – if it’s a technology they’ll just buy it. I think the incumbents will be slow to move because they have no or relatively little incentive to move. The incentive is to lower your operational costs but also you know that once you go into that space your revenues will slow down. Here is where regulation is pushing the incumbents to move. CT: I think the smart ones, and the smart fintechs are going to be the ones that do the B2C game and tailor their user experience and figure out what’s really working from a technological point of view and shift or pivot that business model, Betterment is a possible example of this, to be able to service the B2B2C market. At the end of the day the assets sit with the incumbents. This is an AUM game, therefore the end game is a B2B2C game. The smart fintechs will realise that and they will position first and they will be the winners… The majority [of fintechs] will die, maybe a handful will get either aggregated or acquired by the incumbents and then you will have the players like Saxo Bank and infrastructure players behind this that will be able to power a B2B2C model when the fintechs figure out that the easiest way to acquire assets, the critical mass, is to deal with the incumbents.

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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PROPERTY

London still the GCC HNWI’s preferred real estate market ACCORDING TO CLUTTONS’ LATEST GCC HNWI SURVEY, LONDON HAS NOT LOST ITS ATTRACTIVENESS, EVEN AFTER THE BREXIT VOTE

rexit or not, if London is calling, the GCC will answer the call. According to the recently released third part of Cluttons’ Private Wealth Capital Survey 2016, London has emerged as the favourite global property investment destination in 2016 for its GCC HNWI sample, with 17 per cent naming the British capital as one of their three top international property targets. London also leads as the ‘most preferred’ city for investment in the survey. Investors in the GCC offered a range of reasons for their preference, ranging from pure returns to personal interest. “For children’s education in the future, I want to make a base there,” said one Kuwait City investor, targeting London. A Dubai investor said, “It is a safe city and also good for my business.” Another Dubai investor was even more positive. “Global city with great infrastructure, visionary leadership and compelling economics,” said the investor. One Abu Dhabi investor cited its ‘cosmopolitan’ nature. For investment, London residential in particular has been a star performing asset class, delivering 70 per cent growth in the last seven years alone. In terms of residential real estate, Canary Wharf, South Kensington and South Bank were named as the top preferred London investment hotspots by Cluttons’ sample. Each of course offers a diverse range of

Source: Cluttons, YouGov

TOP PREFERRED LONDON LOCATIONS PRIME CENTRAL LONDON

CANARY WHARF

SOUTH KENSINGTON

SOUTH BANK

2.3 million

430,000

3.4 million

927,000

Yield

3.72 per cent

5.29 per cent

2.54 per cent

3.40 per cent

15 year growth

98.9 per cent

37.6 per cent

105.2 per cent

150.3 per cent

10 year growth

75 per cent

19.3 per cent

72.3 per cent

93.7 per cent

5 year growth

46.3 per cent

34.3 per cent

40.3 per cent

44.3 per cent

Average house price (£)

Source: Cluttons, YouGov

WILL SMITH

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PHOTO: SHUTTERSTOCK/ JEREMY REDDINGTON

LONDON IS CALLING. FANCY LIVING BY THE RIVER?

by Cluttons’ sample. Each of course offers a diverse range of residential assets and price points, catering to different investment drivers, according to Cluttons. “In Canary Wharf for instance, the abundance of new build stock chimes well with Gulf based investors, as the residential products on offer mirror those from their own home markets. Furthermore, the yields in Canary Wharf, of circa five per cent,, offer investors significantly better returns than more core areas such as South Bank (3.4 per cent), or South Kensington (2.5 per cent),” said Cluttons. THE BREXIT EFFECT?

Though GCC investors are still targeting London, the property story in

London is a bit more uncertain than it was even a few months ago. “London’s property market had been stifled by the uncertainty in the lead up to June’s historic in-out referendum and we saw investment volumes fall ever since the referendum date was announced,” said Cluttons. Following the decision to leave the EU, uncertainty has persisted as many questions remain regarding the complexities of a British exit. This has caused continued volatility in the market, with sterling falling to a 30year low against the dollar overnight on June 23, and the weakness persisting throughout the summer. However, going forward this volatility could present a window of opportunity for

international buyers who are looking to enter the market, particularly for buyers purchasing in dollar denominated currencies, such as those from the Middle East, said Cluttons. While some are adopting a ‘wait and see’ approach, some GCC investors are taking advantage of the more attractive exchange rate. “It is clear that some international buyers are taking advantage of the weakness in sterling, while others are waiting on the sidelines, anticipating a value correction, which may well present better deals,” said Cluttons. Following London, New York and Singapore are the leading cities for real estate investment in 2016 outside the Middle East region.

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10/24/16 4:59 PM

MOTORING

THE STIG, WEALTH ARABIA EDITOR WILLIAM MULLALLY, AND TOP GEAR PRESENTER CHRIS HARRIS STRIKE A POSE.

DRIFTING ACROSS THE F1CIRCUIT IN TOP GEAR WEALTH Arabia caught up with the mega-hit car show’s new star presenter Chris Harris about his love of motoring and the GCC’s astounding car culture

he early morning’s sun shown over Yas Marina Circuit in Abu Dhabi, the home of the Formula 1 Abu Dhabi Grand Prix, but we weren’t there for the races. No, we were not even there to drive ourselves, but, rather, be driven. WEALTH Arabia was to spend the day with the team from the BBC’s worldwide hit Top Gear.

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We were handed a helmet and told to wait. “The Stig is coming to get you,” they said. After a few screeching noises in the distance, there he appeared. Who is the Stig? Well, the mystery is part of the fun. But since the beginnings of Top Gear, before it became not only the leading car show, but also one of the most

popular shows on planet earth, there was the Stig—a test driver who never took off his trademark white helmet and driving suit, who always remained silent, but always drove faster than most could dream of. WEALTH Arabia got in the passenger seat. The Stig did not say a word. “Do not go easy on us,” we said, and, soon after, regretted.

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Just minutes later, The Stig had stunned us into silence, and we emerged from the vehicle having gone at speeds we had never reached before when not in an aeroplane. We’ve reviewed many super cars at WEALTH Arabia, but we had never driven like that before. Our stomachs could not have handled a full day with the Stig. Luckily, they did not have to. For next we would be spending time with Top Gear’s newest star presenter, Chris Harris. Though many long time fans of the show considered giving up on Top Gear after the original team of presenters exited,

true car enthusiasts rested easy when Chris Harris joined the team, and, after seeing his work on the show, so have many others. Harris’ bona fides cannot be questioned—he was not merely handed the job the envy of every car nut the world over. A car journalist for years turned YouTube star, Harris has proven to have the knowledge and skill required to take the world’s best cars to their limits. “So what was the first car that you ever fell in love with?” we asked him early in the drive. “It’s a bit like your first love isn’t it? I had a little Mini that I bought before I took my driving test. I took the seats out, put an

exhaust on it, fixed it up, did all the things that you do, and then, after all that, I failed my driving test. It sat there for three months before I finally passed.” All the while, Harris drifted across the track, tires screeching as the super-car tore around one of the circuit’s sharper corners. “I’ve never done that on purpose,” said WEALTH Arabia. How does Harris keep his cool when drifting the world’s priciest cars across F1 tracks? “The key is to forget that you’re going very fast. I just forget the value of the car and the speed, and then it all comes together. But if you start thinking that the ...cont. overleaf

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THE STIG DRESSES FOR THE TRACK, CHRIS HARRIS DRESSES REGRETTABLY.

cont. from page 31

car is very expensive and there’s a wall to hit, you’ll probably hit that wall.” “That feeling of when the grid goes, that’s what I love. It just feels magnificent,” said Harris. Sadly, Harris told us, that first car of his was stolen. But that’s not the only car to have come and gone from his life that he still misses. “The way I look at it is which cars would I pay to be reunited with? I’ve owned 100 cars. Some of them, when they’re gone, a bit like members of the family, you’d quite like them back. I had a 1989 Porche 911 ClubSport that I’d like to have back that’s become quite valuable. I had a Porche 993 GT2 that I sold in 2007 for GBP 129,000, a lot of money. The problem is that car just sold for GBP 1.3 million a couple of weeks ago.” But loving cars is not just pining over the ones that got away. “There’s many things I’d like back, but I prefer to think about what’s the next thing to buy. That’s what excites me.” Even as a Top Gear presenter, with the key to the world, Harris still cannot stop

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himself from being a serious car collector. “I want to own as many of the cars I love that I can. With my job, I’m in a weird position that I can drive any car that I want to. If I want to drive an F12tdf, I can call up Ferrari tomorrow and they’ll say sure. But owning a car is a very different thing. There’s something about it being yours—being able to come into your clutter and finding no fuel in it because that’s the way you left it. My problem is I’m always going to spend 80 per cent of my net income on cars." How can he justify that kind of potentially poor wealth management? “I spend a huge amount of time in cars. When I was a junior road tester for car magazines in the UK, I drove 100,000 miles a year. Now I do more like 50,000, which is still a lot. I want to live the dream, and if it means I’m bankrupt at the end of it, so what.” WEALTH Arabia cannot endorse that sort of investment strategy, but we certainly can empathise with it.

At least he’s not alone. In the UAE and broader GCC, Harris has seen first hand that the region is home to some of the world’s biggest car enthusiasts, and is one of the key markets for the best cars in the world. “The car culture in this area is mindbending. I’ve been in the GCC many times, and it’s amazing. If you really research what’s here, the best cars in the world are probably in this area. This is the epicentre of hyper-cars. The stuff you see on the street is only the tip of the iceberg—it’s the private collections where the real gems are. I got taken to a private collection and I said to the guy, ‘there’s only one of those in the world!’ and he said, ‘Yes. It’s here.’” Though Harris may never have a collection to match some of those in the GCC, that does not mean he has any regrets about his choice to dedicate his life to cars, or to take on the Top Gear job. “I would pay to do this all day, and someone is actually paying me to do this.” The latest season of BBC’S Top Gear is available now on Starz Play

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1956 MERCEDES-BENZ 190SL

MOTORING

THAT CLASSIC CHARM The owner of this 1956 190SL originally bought the car to sell on for a profit. But now that he has tasted the finest in classic car lifestyle, selling such a beautiful machine on has lost much of its allure, writes Tom Paye

nyone with a penchant for classic motoring will happily explain that classic cars represent some of the best investment opportunities anywhere. Never mind stocks, futures or property— the right classic car will offer enormous value growth of the course of 10 years. It’s a simple case of supply and demand, after all—there are only a finite (and dwindling) number of classic cars, and automotive enthusiasts across the world are happy to pay top dollar to get their hands on them. As a result, just 10 years ago, it was possible to pick up a mint Ferrari 365 GTB/4 ‘Daytona’—one of the most exotic

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late-1960s supercars to have ever graced the world’s car shows—for around $400,000. Today, they go for around $1.5 million. It’s a similar story with the Aston Martin DB5, and even the Lamborghini Miura. Year after year, these types of cars smash auction records when they are put up for sale. Now, the people buying these cars at such inflated prices almost certainly do not view them as investments. They view them as collectors’ items, a chance to re-live the jet-set lifestyle of the past, a window into the glamour of the golden age of the silver screen. These owners understand that it costs plenty to buy into that lifestyle.

They are the reason why the right classic cars appreciate in value so quickly. On the other end of the spectrum, you have the sellers, many of whom will have gotten lucky in predicting what the next desirable classic will be. For them, the classic car game really is simply another way to make money—an investment to flip when the time is right. However, given the undeniable allure of some of these beautifully crafted classic machines, a seller can easily get sidetracked. What happens when, upon sale time, you do not want to give up the classic you’ve become attached to?

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THE THE CURRENT CURRENT MERCEDES-BENZ MERCEDES-BENZ SL SL RANGE RANGE OWES OWES ITS ITS EXISTENCE EXISTENCE TO TO THE THE 190SL. 190SL.

Such is the predicament facing Dubai resident Pasha Nirouzad. A few years ago, noticing the opportunity in the classic car market, he contacted sellers of classic fixeruppers in Europe, with a view to restoring them and flipping them in the UAE for a profit. Eventually finding an expert, his first question was, “Which car is going to appreciate in value the fastest?” The seller obliged, pointing Nirouzad in the direction of a tidy Mercedes-Benz 220SE Coupe from 1962. A large luxury barge of a car, the design was extremely modern for the time, it could easily be seen as an early ancestor to the Mercedes S-Class Coupe of today. Given it started at 32,500 deutschmarks when it launched in 1962, it was just as expensive as Mercedes’ top models are today. This model was already reasonably well-kept when it was bought. There is an

enormous, imposing front chrome grille, which glitters as if it had just rolled out of the showroom. The same can be said for the chrome front bumpers, which can be a problem in old 220SEs due to the fact that they’re easily dented. The white paint is original and looks fabulous, while the oldstyle hubcabs serve as a visual tie between the body and the enormous black wheels, which would otherwise be lost under the enormous wheel arches. It looks fabulous and imposing—there is more than a whiff of the old 600 Grosser in the 220SE’s styling. Inside, things still feel luxurious, despite the styling being over 50 years old. Across the dashboard lies a giant slab of heavy, polished wood, on top of which sit various analogue buttons and switches. It’s unclear what many of them do, but

certainly this would have felt at the height of technology at the time. The seats are made of stunningly finished leather that still looks well finished today, yet due to their age, they’re soft and squishy like an old, faithful sofa in a smoking room. Despite the two-door layout, the 220SE is incredibly roomy in the front and back—which tells you something about the gargantuan proportions of the exterior. As befits the car, the steering wheel is huge, with thin spokes running through the middle evoking the threepointed Mercedes star. All told, this is a classic car in great condition, and things are even in quite good order mechanically. Naturally, there are issues with the drive, simply by virtue of this being a car from the early 1960s. The play in the steering is hilarious, ...cont. overleaf

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MERCEDES-BENZ 220SE COUPE

EVEN IN THIS LESS-THAN-PERFECT STATE, THE INTERIOR IS BEWITCHINGLY GOOD.

THERE IS MORE THAN A WHIFF OF THE MERCEDES 600 GROSSER ABOUT THE 220SE COUPE.

SUNSETS DO NOT GET MUCH BETTER THAN THIS.

cont. from page 31

and the brakes do very little until you have your foot welded to the floor. The size of the car doesn’t help—thanks to the lifeless and indirect steering, it’s incredibly difficult to thread the car around smaller streets. On the upside, the engine has good poke with bundles of low-down power available to haul the large body forward. Getting up to speed is reasonably effortless—it’s not fast, in any sense of the word, by modern standards, but it really isn’t too slow either. A shame then, that this model has been fitted with an automatic gearbox, which is prone to missing gears without the right persuasion. You really have to concentrate when driving this car. But then you look at it, and none of the above matters. The 220SE Coupe oozes style and sophistication—it just feels so special driving around in it. You’re happy to cruise around at low speeds, because when you look this good, who cares if you’re

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late? Late is better, because you get to spend even longer piloting this wondrous, handcrafted machine. Few other cars in Dubai garner this many looks, this many phones flipped out to take a picture, and this many approving nods. The exception, of course, is Nirouzad’s other classic car, a 1956 Mercedes-Benz 190SL, painted in unoriginal but stunning turquoise-blue. This is the classic car that stole its investor’s heart and will be under his ownership for many years to come. And from the outset, it’s easy to see why. The 190SL was Mercedes’ mass-market answer to the exquisite (and very exclusive) 300SL Gull Wing. That car has gone down in history as one of the all-time greats, and has been described by some as the world’s first true supercar. Regardless, because of its price, it never sold in enormous numbers, but Mercedes knew that it was onto something with that sleek, two-seater

design, and so it created a lower-order SL model, one that looked like the 300SL, but could be bought by people other than royalty. Some say that the 300SL was the genesis of the current SL-Class range, and while it’s technically true that the 300SL came first, it was the 190SL that brought in the idea of an entire range of two-seater sports cars from Mercedes. The 300SL is more of a direct ancestor to the current Mercedes-AMG GT supercar. The SL range, meanwhile, owes much more to the original 190SL because it was the first SL to be sold as a convertible—something the SL range has stuck with ever since. Still, the 190SL carried over plenty from the 300SL—it just made the car more market-friendly. The 190SL featured the same fully independent suspension (hugely advanced for the time), and the basic styling and engineering detailing remained the

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1956 MERCEDES-BENZ 190SL

MOTORING

same. However, things changed when you looked under the bonnet, where you’d find a 1.9-litre straight-four SOHC unit capable of putting out 104 bhp. A supercar this was not. Instead, it was an incredibly stylish and comfortable way of getting from A to B. Given the photos accompanying these words, we think you’d agree that the car has aged well. The swooping lines that lead from the front wheel arches down the side, and again over the rear wheel arches, are pure 1960s racer. The front headlights and grille scream 1960s glamour, and the sloping rear end hangs beautifully off the back. On the inside, this one features bloodred leather seats, red carpets, and little else. But there are beautiful panels and switches crafted out of solid metal splashed across the entire cabin—even the three pedals look as if they were handmade by artisans. The steering wheel is enormous and skinny, and there is a long, skinny manual gear

shifter protruding from the middle of the floor, with a knob that feels like an expertly made Baoding ball. Wonderful as the package is, it isn’t perfect. As with the 220SE Coupe, Nirouzad bought it on advice from his contacts in Europe. However, after shipping the car over to the UAE, his trusted Mercedes mechanic in Dubai closed down, and he hasn’t found another that he trusts to restore the car back to its former glory. He’s even considering sending it back to Europe for a full restoration. In brief, the exterior paint is worn and cracking in some places, the front chrome bumper is dented, and the interior leathers are extremely worn and in need of repair. And, worryingly for this region, there is no air conditioning. Mechanically, though, the 190SL is in even better nick than the 220SE Coupe. You may have to pump the throttle a few times to get fuel into its system, but the 1.9-litre engine breathes into life extremely smoothly for a 60-year-old car. And once you get moving, it’s a largely trouble-free drive. With the proviso that you make allowances for this being a 1956 car, of course. The clutch and gearbox are extremely forgiving, but there is a definite biting point for the left pedal—about two inches towards the floor. Feather the accelerator and you’ll be in for a jumpy start to your journey, so it’s a case of really committing with the throttle and hoping you do not stall, which you will not, thanks to that forgiving clutch. First gear is a long one, with the car allowing you reasonably high speeds before it gets anywhere near the rev limiter. What’s more, the power isn’t bad. There is nothing drastic about the speed, but you’re aware of the power and torque surging you forward without it feeling like much effort. It makes a decent noise as you approached 3,000 to 4,000 rpm, too. Shift into second, and you’ll be more than comfortable trawling around residential streets—this is another long gear and it’s very versatile, as capable of hauling the car off a speed bump as it is cruising at 40 km/h. Third gear offers plenty of grunt above those speeds, and top gear, fourth,

will get you comfortably up to 100 km/h. Any higher than that, though, and the wind buffeting becomes intolerable—after all, retractable glass wind panels hadn’t been invented when the 190SL was built. Really, though, this isn’t a car to drive fast. It responds much better to softer, slower treatment. It’s the kind of car that’d be much happier cruising down Jumeirah Road than it would speeding down Sheikh Zayed Road. And this is a good thing, because the steering and brakes would be downright dangerous at speed. As is the case with the 220SE, the play in the steering is 1960s road movie-esque, and there is very little feel through the steering wheel, so you’ve little idea of what’s happening on the road. The brakes are the original drum units, and they do next to nothing. As a result, the best way to drive the 190SL is slowly, relaxed with the wind in your hair and the sun on your face. Let’s be honest, the 190SL has even more of a ‘look-at-it’ factor than the 220SE does. It’s simply stunning, and knowing you’re cruising about in such a wonderful machine just puts an enormous smile on your face. Passersby love it, too— park a 190SL next to the latest Ferrari in Downtown Dubai, and the Ferrari will be all but invisible. It’s the epitome of cool, this car. Naturally, all of this cool comes at a price. This 190SL isn’t anywhere near showroom condition, yet it’s still valued at around AED 550,000. Once it’s restored, that number will be looking closer to AED 1 million. The 220SE, meanwhile, is more reasonably valued at around AED 170,000, but that is a number that is only set to increase as time goes on—such is the world of classic cars. Still, Nirouzad is open to selling the 220SE Coupe now—he’ll have made a decent profit on it and set out what he achieved to do. Things aren’t so clear-cut when it comes to that beautiful 190SL, though. He aches to restore it to showroom condition, and after that is done, wouldn’t it be such a shame if he could not enjoy his efforts? “I think I’ll keep it another few years after that,” he says.

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PHOTO: SHUTTERSTOCK/ ANDREY BAYDA

WILL SMITH

40 40

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10/20/16 4:39 PM

GOOD TALK

You never know why a city speaks to you, but my two favourite cities in the

world are Miami and Dubai. It’s just the energy of providence.

The pursuit of happiness WILL SMITH SPEAKS ON WHY HE LOVES TO COME TO THE MIDDLE EAST, HIS LOVE OF TRAVEL, AND MORE What do you love about Dubai? I came to Dubai 15 years ago, and I came during a time that 40 per cent of all of the world’s cranes were in Dubai. The entire skyline was cranes! Dubai dreams the way I dream. When I landed, I thought, that’s the way I would build a city! It really flows with who I am. You never know why a city speaks to you, but my two favourite cities in the world are Miami and Dubai. It’s just the energy of providence. The way that the people and the royal family and the design and the ideas have to be the best in the world—not on par, but everything has to be the best in the world. I love that energy.

We’ve been travelling around for the last month, and there’s a character called Captain Boomerang, played by Jai Courtney. I think Jai Courtney would be the best travelling buddy because, as I learned on the film, he’s unbound by the necessity to act normally.

What is your itinerary out for a perfect day out in Dubai? You have to start the day at Skydive Dubai. That’s the best way to see the Palm from up high. I brought my kids to Dubai, and we jumped together. I’ve jumped probably five times at Skydive Dubai. I play a lot of golf, and I love to play in Dubai, as it has some of the best golf courses in the world.

Where’s the best place in the world to hide out? There are a couple of really cool hideouts for me. I love Trinidad, in the Carribean. If I’m going to disappear, South Africa is another really good place to get away.

How has your experience been in Dubai with your family? My daughter was here a couple of months ago, and it was the most beautiful thing—she Facetimed me from out in the desert on a camel. I thought that was so beautiful—the cross of Dubai’s high technology with the old style of technology. And the Wi-Fi is really great in Dubai, have you noticed? You recently starred in Suicide Squad—which of the cast would make the best travel buddy? From the whole Suicide Squad, there are about 10 of us.

A motoring question—on set, did they let you drive the Batmobile? When I first saw it on set, I lost all my cool. Immediately I dropped out of character and was five years old again. But they won’t let anyone drive it. I wanted to, but can you imagine crashing the Batmobile? That’s a bad insurance day right there.

Where haven’t you been? The Seychelles, the Maldives, Bora Bora. I haven’t done a lot in Indonesia either. I would love to go through there. Those are the top ones on my list. What can’t you travel without? I have to have my iPad. I have my whole library on there. I don’t watch movies a lot on flights because of the small screen. I feel like it’s disrespectful to my fellow artists. I can’t say, ‘Hey Denzel! I caught your movie on the flight! You were so little!’ Flying is my reading time. Could you settle a bet for us? "Summertime" is the jam, right? “Summertime” is the jam. Oh yeah, that’s the one. ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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10/24/16 5:12 PM

LUXURY RESIDENCES

We’re all MAD here

INSIDE THE HOME OF ONE OF THE GULF’S QUIRKIEST COLLECTORS, OMAIRA FAROOQ ALOLAMA PHOTOGRAPHS: FLORANTE MAGSAKAY

ALOLAMA ALOLAMA HAS HAS USED USED HER HER YEARS YEARS OF OF TRAVELING TRAVELING TO TO SEARCH SEARCH FOR FOR INTERESTING INTERESTING PIECES PIECES FAR FAR AND AND WIDE. WIDE.

f all the many homes of the GCC, the Dubai home of Omaira Farooq AlOlama, Managing Director of the ALF Administration, might be the most immediately striking. But to AlOlama, that is exactly the idea. “When anyone walks in they say, oh gosh, there is so much stuff! It’s so colourful!” said AlOlama, from a chair that would have looked right at home at one of the Mad Hatter’s tea parties, when WEALTH Arabia visited her home. “When you grow up and are encouraged to be unique and have your own identity, that is reflected in your interior design. I always tell my kids, you do not have to conform, you always have to think about what suits your personal taste. I always believe that design should be about your personal taste.” An Emirati who has also lived in the US, AlOlama’s personal taste was shaped across her travels. “I am Middle Eastern, but I grew up in the US, so my thinking is completely a mismatch. I like that about my home—it’s about learning all the cultures, and it influences my style when I choose things. It shouldn’t fit in one particular genre—it’s got to be something that is a reflection of an idea or story.” “I love to travel, and I think it’s just about growing up in little areas in the US that made me really appreciate craftsmanship. I love to focus on colour, but I also tend to like vintage inspired furniture. Some of them do not have to be very pricey as long as there is a story behind it. that is what this whole concept started from—stories.” ...cont. overleaf

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LUXURY RESIDENCES

cont. from page 43

AlOlama’s collection has come together over multiple years. “I’ve been collecting the furniture for over a decade now, and essentially this took about two years. We have to get the glasswork done, figure out where to source the materials. I usually like to buy from the place that I’m in instead of having things shipped over. The tiles are from Ras Al Khaimah Tiles. The majority of items I try to get locally because if something goes wrong it’s easy to fix.” AlOlama’s most treasured art pieces are Iraqi paintings that she found from a seller in Dubai. “I was in Global Village almost seven years ago in one of the Iraqi pavilions. A man was sitting there and he said to me, if you appreciate art, I have a gallery showing in Dubai for a week. I said sure, I do not mind. He had paintings of people who were teachers during the Saddam Hussein regime who were persecuted, and I ended up buying a lot of it. The man who sold it said that it wasn’t about selling it at a high price, it was about getting his story out there, as, at that time in Iraq’s history, they weren’t allowed to have a voice.” But not all her art is painted. Her unique collection of handbags are something she treasures, and hopes to pass on to her children one day. “The handbag collection started after I became a mother. I started thinking, what am I going to pass down to my kids? What if they do not like my taste in furniture, or my taste in art? Well, I thought, at least they’ll like handbags!” Scattered across her home are pieces dedicated to one of her favourite pop culture creations—Alice in Wonderland. “I have a lot of pieces are inspired by Alice in Wonderland as well. The quote that I love most is emblazoned right on one of my favourite pieces: ‘We’re all mad here.’” The only thing limiting her collection now is space. “Honestly, if I could find more areas of my house, I would add something. The battle within me when I’m looking at a new item, is always about whether or not I have a place to put it!”

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ALOLAMA HOPES HER DAUGHTERS ONE DAY ENJOY HER HANDBAG COLLECTION AS SHE DOES.

ALOLAMA'S COLLECTION FEATURES MUCH FROM THE GULF.

A SCULPTURE BY LEGENDARY BROOKLYN BASED ARTIST JAMES RIZZI.

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he sport of kings, perhaps; the sport of a king’s ransom, definitely – in his introduction to How to look cool whilst learning polo, author Steve Thompson tells us, “It doesn’t really matter where you go to play in the world you cannot escape the fact that you have chosen one of the most expensive pastimes on the planet.” His emphasis, by the way, and he goes on to say, “And with that in mind there is something else you really ought to consider: there is nothing available at the pharmacy that will ease the depression of a bad day on a horse with a polo mallet.” So you cannot claim not to have been warned! A self-confessed addict of the sport of polo, Steve Thompson is a familiar figure to many in the United Arab Emirates as the resident Polo Coach with the Dubai Polo Academy (www. dubaipoloacademy.com) at the Dubai Polo & Equestrian Club. The title of the book is a bit of a giveaway. It takes a determinedly lighthearted approach to the serious subject of mastering of what is, as well as being not cheap, one of the more complex and fast-moving sports imaginable. As Steve put it to me himself some years ago, and a mantra that is repeated in the book, “It really doesn’t matter if you miss the ball. It’s polo – you just need to look fantastic!” Indeed, he goes further than this, “…I just want to make sure I look fantastic when appearing in hello! Magazine. And now you can too – all you need to do is follow the instructions in this book.” He’s kidding, I think [but I’m not 100 per cent sure]. In fact, the jokey style and, in some cases, laugh-out-loud funny cartoons from artist Dianne Breeze, do not quite disguise the fact that this is an engagingly fact-packed book that really does take you through all the basic steps you need to master the skills of the game, from mastering riding to perfecting your polo swing. Vastly outnumbering the cartoons are the photographs. Of course, there are plenty of action shots from polo matches but there are also very many images that show how both horse and rider should be behaving.

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And on the subject of the horse, ‘your big furry mate’ as Steve puts it, “Consider for a moment that a friend has jumped onto your shoulders and is making you run around whilst leaning off, swinging a mallet, kicking you in the ribs and pulling you in the mouth when he wants you to change direction, slow down or stop. Difficult, I think, to stay focused on the job whilst trying to keep you both upright and balanced. Now consider the whole scenario again, but doing it with blinkers on.” In part one of the book there are chapters on learning to ride, followed by

basic and advanced polo riding. In part two, you’ll find detailed chapters on how to swing a mallet. I’ve tried, it’s not easy –after all you don’t want to knock your horse out! The book concludes by addressing some of the more common problems aspiring polo players may come up against together with an illustrated stretching routine to help you limber up. This is a fun and useful introduction to the sport but it can only be an introduction. In his parting remarks, Steve says, “Polo is an extremely complex sport and requires

an abundance of skill sets that need to come together to create a good player… money can’t buy skill. Only training can produce it!” But if you fancy yourself thundering across a polo pitch at full pelt, stick in hand, picking up a copy of How to look cool whilst learning polo is a good way to begin to understand some of those complexities. The book is available from Steve Thompson’s website, www.pitchjunkie.ae, price AED 220.

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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LUXURY PRODUCTS

Montegrappa’s evolution to bespoke LEGENDARY LUXURY ITALIAN WRITING INSTRUMENT PRODUCER MONTEGRAPPA HAS MOVED FROM MAKING PENS OF UTILITY TO MAKING UNIQUE PIECES OF ART TO BE TREASURED FOR GENERATIONS

CTED THE OCATION.

A SKETCH OF A MASTER CRAFTSMAN.

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A ONE-OF-A-KIND CREATION.

n the world of luxury writing instruments Montegrappa needs no introduction. Montegrappa has been making high quality pens and other luxury items for over 100 years, crafting their pieces in the same building in Bassano Del Grappa, in the Northeast of Italy, all the while. But while Montegrappa is known now for its high-end pieces that have sold for incredibly high sums, including the most expensive pen, which sold at an auction in Hong Kong for $8.5 million, that wasn’t always the case. “During World War I, all factories in that area were forced to convert to aid the war effort,” said Charles Nahhas, Managing Director, Montegrappa Middle East. “Montegrappa was exempted from that because pens were considered important. A soldier had to have his helmet and his gun, but he also had to have a pen. It was a communications tool at that time. It did not matter how beautiful it looked—even though Montegrappa was making higherend pens at that time, it had to work.” As a result, during its earliest days, Montegrappa focused on making pens of utility. But even then, it still found its way into the hands of the most prominent writers of the age. “Ernest Hemingway was stationed

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in the building that had been converted into a hospital next door to the Montegrappa factory, and he was driving ambulances up and down the mountains in that time. We recently opened a Hemingway Museum with John Hemingway, his grandson, to commemorate that relationship.” But, while Montegrappa had to focus on making simpler pens in those days, that doesn’t mean it did not have its eyes on more elaborate pieces, as it came from a region famous for its jewellery craft. “The region that Montegrappa comes from in Northeast Italy is known for its silver and jewellery. “The region has a history of craftsmanship that we are proud to continue on. There is a genuine history there.” And while the fine materials and the designs that Montegrappa used evolved over time, the biggest change to their ethos came around 20 years ago. “Until 20 years ago, the company was focused on making pens for a functional use. But what has happened, similar to what has happened with watches, is that these items have not become purely functional, they’ve become something that is a luxury and has a symbolic nature.” For Montegrappa, that symbolism isn’t just one of status, but of high-minded pursuits. “For us, the pen is the symbol of knowledge, learning, and the symbol of the writer. To us, we’ve gone into a more symbolic product, and as a result, we’ve started to get more elaborate in our designs and the stories behind them.” In order to create pieces that fit towards clients’ modern needs, less about functionality, and more about their beauty and fine craftsmanship, Montegrappa focused more on creating focused, limited edition pens centred around specific concepts. “The grandson of the man who bought the company 80 years ago introduced the first limited edition pens, which brought us to where the brand is today. Among pen collectors, we are known as the brand of the niche, limited-edition pen collector. We started making pen series of 900 to 1000. Now, we are working to even smaller editions, that are very exclusive. Clients can now come in and buy a limited edition pen, some of which made of solid gold may cost in excess of $100,000. One piece we did in conjunction with Paolo Coehlo, for example, to celebrate The Alchemist, costs over that price point.”

Montegrappa enthusiasts aren’t just interested in having a limited edition pen, though. Often, they’ll want a specific pen within that limited line. “Now we’ve reached a point where we’ve identified an interesting niche. When people buy limited edition pens, they’re very interested in the limitation. They are also quite interested in the limit number. If there are 999 pieces, they might want a specific number related to their birthday, for example. Often, we will pre-sell those to specific collectors based off those specific interests.” And with those specific needs in mind, Montegrappa has gone even further. Now, they are focusing on making unique pens, not just one of a thousand, but one of a kind. “One thing that that collectors are more interested in are bespoke pens, pens that no one else has—an edition of one of one. Typically in the past the price tag on doing that is prohibitive and is done for celebrities. But now we’ve productised that, and made that something that has a price tag.” AN ETCHING TO LAST LIFETIMES.

“With our bespoke offering, for the fraction of that price, you can have your own unique pen. A client can make a pen to their own specifications and get it engraved, and then it is a piece of which there is only one in the world. And the work done on it is meticulous, making each piece special. The price point is much more accessible than it used to be. “With a unique pen with an engraving, it can cost around $10,000. If a client would like something further done, for example a lacquered inlay, stones or embellishment, that can also be done for an added cost. The idea behind that is to give something that can be specific to one individual, but is also built to last a lifetime—or many lifetimes. “If, for example, you want to give your son a gift on his wedding that can be passed down through generations as a family heirloom. that is the sort of thing that now doesn’t cost as much as one might think it would.”

A LOOK INSIDE MONTEGRAPPA'S CAREFUL PROCESS.

ISSUE THIRTY SEVEN - OCTOBER - DECEMBER 2016

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LUXURY RESTAURANTS

AN INSIDE LOOK AT THE STUNNING RESTAURANT.

Top British export

GORDON RAMSAY’S BREAD STREET KITCHEN, NOW OPEN IN DUBAI’S ATLANTIS HOTEL, HOLDS ON TO THE CHARM THAT MADE THE ORIGINAL LONDON RESTAURANT SO POPULAR, WRITES TOM PAYE

ith so many celebrity chefs opening up eateries in Dubai, it was only a matter of time before Gordon Ramsay, arguably the most famous of the bunch, would return to the city with his own restaurant. However, unlike his last foray into Dubai, Verre, Ramsay has played his Dubai hand more carefully this time, opening up a branch of one his most successful chains, Bread Street Kitchen, at the local landmark, Atlantis, The Palm. The two restaurants could not be more different in their approach.

Verre, which opened in 2001 and was disowned by Ramsay and renamed in 2011, was the chef ’s first eatery to be opened outside of the UK. The Hilton Dubai Creek restaurant was an upmarket, high cuisine affair showing off the best of Ramsay’s deluxe recipes. By contrast, Bread Street is a family-friendly, comfort food specialist designed to please the crowds. The first Bread Street opened in London in 2011 to mixed reviews – food critics enjoyed the simplicity and quality of the menu but were miffed by its laidback, bar-like atmosphere.

Customers showed their enthusiasm with their wallets, though, and Bread Street is now a bona fide London hotspot with successful branches in Hong Kong, Singapore and, now, Dubai. So how does the latest chain stack up? Well, walking in, it’s clear that Bread Street Kitchen Dubai has carried over much of the cool Britannia charm that made it such a hit in London. The space is open-plan in an industrial sort of way, and it’s full of light thanks to floor-to-ceiling windows on the far side of the entrance. ...cont. overleaf

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11th Islamic Business & Finance

Awards 2016

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23rd November 2016 The Godolphin Ballroom, Emirates Towers Hotel, Dubai 7pm cocktail reception followed by dinner and the awards ceremony

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LUXURY RESTAURANTS

cont. from page 50

Medium-shade brushed stone contrasts with light wood furnishings, while comfortable-looking booths made from quilted leather hark back to the idea of a classic British members’ club. The kitchen is open-plan, too, meaning you can see Ramsay’s chefs working away on his creations, while another open section is dedicated to the fresh bread made in the kitchen. Walking past it, you’re treated to a the soft, comfortable aromas of home baking, evoking a feel of passing by a small bakery in a tiny English village. Those floor-to-ceiling windows open up to a tidy garden area. On the night we visited, British-style bunting hung proudly above the perfectly shaped lawn, and underneath the flags, smiling revellers sat atop high-end pub garden furniture, sipping at their cocktails and whiling away the night in deep conversation. If you want a slice of England at its most enjoyable, this would be a good place to start. In terms of the menu, despite the name, Bread Street doesn’t offer that much in the way of a boulangerie. There are plenty of bread options, of course, but the menu is mostly a celebration of hearty British classics that have been modernised to appeal to a more international audience. But do not be fooled by the familiarity of the items on the menu, or by the informal atmosphere–Bread Street straddles the line between fine dining and casual eatery, with each dish prepared to exacting standards. Naturally, the food is priced to match that. What’s more, while the main courses are almost obvious takes on British cuisine, the starter menu contains plenty of inventive dishes that take inspiration from all over. The salmon ceviche, with ruby grapefruit, avocado and jalapeno dressing, is a fresh and exciting Ramsay take on South American cuisine, while the labneh with sweet and sour aubergines, beetroot, mint and hazelnut dressing, fits naturally in this Middle Eastern environment. That said, for our money, the classic British dish of foie gras and chicken liver parfait, with earl grey tea jelly, plum chutney and toasted brioche, is the one to go for. The brioche is crunchy

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CHEF GORDON RAMSAY IN FRONT OF THE ATLANTIS, WHERE THE RESTAURANT IS LOCATED.

on the outside and soft within, the chutney sweet and tangy, and the foie gras rich and flavoursome. It’s a dish that will melt the heart of anyone keen on big flavours. For other interesting takes on modern British cuisine, look to the hot starter menu, on which the pick of the bunch is the English pea soup with curried lobster. The soup itself is creamy and thick, while the spiciness of the lobster plays beautifully against the plainness of the vegetable. The main courses are where the Bread Street magic really happens, though. For beautiful simplicity, opt for an item from the Josper Charcoal Grill, which does a selection of grilled meats served with a choice of sauce. The grain-fed sirloin steak is obviously one of the most popular items on the menu – and with good reason. Paired with garlic butter, it’s juicy, smoky and packed full of flavour. The milk-fed veal cutlet, accompanied by the green peppercorn sauce, is another star on this menu. There are more cerebral dishes on the menu, too. The roasted cod with crushed

potatoes, artichokes and salted capers is a standout, thanks largely to its red wine lemon sauce. And if you’re really angling for a wellcooked, hearty British dish, you cannot go wrong with the astonishingly well put together Beef Wellington. Suitable for two people, it comes with truffle mash, spiced carrots, pickled walnuts and a delicious marrowbone sauce. Be warned, though, the Wellington constitutes an enormous meal, meaning there is little need to order anything else if you opt for it. Bread Street may have the appearance of a tourist trap nestled in one of Dubai’s most iconic tourism destinations, but upon closer inspection, the restaurant has a real soul to it. The menu is sympathetic to British history and tradition, but it has dragged those traditions well into the 21st century, creating a modern English eatery that few others can match. It may be a branch of an existing restaurant, but Ramsay has very successfully brought the charm of the original London venue to Dubai.

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HNWI CHAT

Sitting down with a jetsetter SERGEY PETROSSOV, CEO, JETSMARTER

Do you have a favourite suit? I don't have a particular suit I prefer, but my favourite type of suit is a hand made suit. What car do you love most? My favorite car is a Tesla. I personally own one and I absolutely love it. Which watch finds your wrist most regularly? I don’t particularly have a favourite watch. What's your preferred travel destination? I enjoy visiting the Caribbean islands. I would love to go to the Maldives, or some other private island resort with my family. What restaurant in the world do you keep going back to? My favourite restaurant in the world is a fine dining Japanese restaurant, Waku Ghin in Singapore. What's your personal life philosophy? Don’t wait, just do. Have faith in your outcome and don’t stop believing when things get hard. What are your hobbies outside of work? My kids and my family are my number one hobby and priority. What's your proudest memory? One of my proudest memories thus far would have to be launching JetSmarter. EVGENY KUZIN Seeing a smile on the customers face from their satisfaction of our product makes it all worth it.

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UP TO

EXPECTED PROFIT P.A

Licensed and regulated by Central Bank of UAE p50_HNWI chat.indd 55

SMS "wealth" to 4248

wealth@nationalbonds.ae

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