Room to improve private universities in the UAE


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The UAE’s higher education sector has grown very rapidly since the country’s first institution of higher learning, UAE University, opened in Al Ain in 1976. Today, more than 100 universities and colleges operate here, including three federal institutions and 37 branches of overseas universities.

The number of Emirati students enrolling in the federal universities, however, has also been growing – by about 20 per cent every year. Of the 120,000 Emirati university students, about a quarter study at UAE University, Zayed University, or the Higher Colleges of Technology.

As The National reports today, a new study suggests that the federal higher institutions may soon be unable to cope with the still-rising number of Emirati candidates.

That would mean that increasing numbers of Emiratis would opt for private education. And unlike the federal schools, private universities charge tuition. That means many of the additional students entering those schools will need financial help to continue their education.

The study also highlighted another issue: the quality of education provided by some private universities. Dr Ali Bhayani of the University of Wollongong Dubai, examining the job market for graduates, found that employers have little enthusiasm for graduates from small, unregulated private for-profit universities. The 34 diverse employers he interviewed unanimously said their first choice when hiring Emiratis is for graduates who had studied abroad, then for those from UAE branch campuses of foreign schools, then for federal-university graduates. Small private for-proft schools, he said, “don’t have a good reputation”.

As more Emiratis head towards those schools, this undeniably needs attention. Higher standards, careful inspection and a culture that expects students to work hard are all essential qualities of a solid system.

The absence of uniform standards suggests an obvious place to begin. In the free zones of Ajman, Fujairah and RAK, private universities face no accreditation or licensing requirement at all.

In many countries universities are competitively ranked, on graduates’ job prospects, the proportion of faculty with doctorates, the size of the library and so on. Such published rankings would allow students to make informed choices about where they should study. The idea of introducing such rankings in this country is very welcome.

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Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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