School’s out ... of classroom space


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Abu Dhabi Education Council’s decision to close villa schools was a necessary measure to ensure the quality and safety of the emirate’s educational institutions. Only 35 of the 72 villa schools operating when the decision was made in 2008 remain open. Of those, 15 are expected to close by July and the remaining 20 will do so next year.

The downside of ensuring schools are sited in safe, purpose-built facilities suitable for children is a shortage of classrooms, putting some children’s education on hold. While more schools are being built, with six new Indian schools expected to be ready to accommodate 15,000 pupils by the end of 2015, some are behind schedule.

As The National reported yesterday, the opening of Abu Dhabi Indian School's new campus has been delayed, possibly until the start of May. Another Indian-curriculum school, the Shining Star International, has not yet begun classes, several weeks after the start of the Indian school year. According to the operator, Sanjive Khanna, the delay is because Adec has not provided premises for the new school .

In both cases, the delays will disadvantage students, who will have to make up for the curriculum they are missing now through extra weeks added to the end of the academic year.

This is an unacceptable situation, for which responsibility ought to be shared by school operators and Adec. Schools based in villas have been given years to find premises that are suitable, while Adec has a responsibility to plan ahead to ensure sufficient capacity.

For Adec, this is not as simple as for most countries, where a surge in births would alert authorities to the need to have sufficient primary school places several years hence. In Abu Dhabi, where most students’ parents are expatriates whose presence depends on the whims of the global economy, this kind of advance warning is rarely available.

Even when 3,500 students enrol at the Abu Dhabi Indian School, there will still be pupils in search of a school to attend, causing understand­able concern to parents. To avoid this kind of problem, there is a need for innovative solutions, such as requiring corporations and departments hiring staff with school-age children to ensure they can find a place for them at an approved school. What is clear is that the current situation cannot be allowed to continue.

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Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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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