Dubai plans to present several infrastructure sector investment opportunities to local and international investors as it looks to build a “productive ecosystem” of public-private partnership in the emirate.
The Dubai International Public-Private Partnership Conference, being held in October, will discuss PPP opportunities in water and power, roads and transport, healthcare and urban development sectors, Dubai Media Office said in a statement on Monday. The event is being held under the umbrella of Expo 2020.
“We will work together with our strategic partners to unveil a portfolio of vital projects during the conference, which offer real opportunities for partnership with the private sector,” Abdulrahman Al Saleh, director general of Dubai’s Department of Finance, said.
“These projects will provide a solid pillar for further building a vibrant PPP environment. We aim to transform Dubai into one of the world’s most prominent destinations for successful PPPs in investment, contracting, consulting, infrastructure development and other vital areas related to the development of government projects.”
The event aims to foster a dialogue on partnership opportunities between the public and private sectors, and explore “innovative approaches” for investment partnerships with investors. The conference will also be attended by Dubai government entities including Dubai Electricity & Water Authority, the Roads and Transport Authority, Dubai Municipality and the Dubai Health Authority.
“The event will create an enabling platform for all stakeholders to work in harmony to develop Dubai’s PPP ecosystem,” the statement said.
Governments in the Gulf region are increasingly turning to the PPP model, which can help finance major infrastructure and utilities projects. Many of them are developing legal frameworks to regulate PPP projects, which are expected to improve transparency and attract investment.
Dubai utility company Dewa, which has invested about Dh86 billion ($23.42bn) over five years to increase its water and power production capacity, will be among the entities discussing investment projects.
“Dubai is seeing several major projects that offer promising investment opportunities, especially in the fields of renewable and clean energy,” Saeed Al Tayer, managing director and chief executive of Dewa, said.
“Co-operation and integration between the public and private sectors are an important pillar for achieving the emirate’s goals.”
Dubai RTA has already attracted foreign investments through various partnership projects last year.
It has “developed a comprehensive roadmap to enhance partnerships with the private sector in the next five years,” which features 14 projects valued at more than Dh5bn, its director general, Mattar Al Tayer, said.
“These include projects to develop infrastructure and transportation services, such as bus stations, multistorey parking buildings, road lighting systems and the development of land,” he said.
Dubai Municipality also plans to present more urban development deals.
This year, it launched its Dh4bn waste management project, one of the biggest PPP investments in the UAE’s renewable energy sector.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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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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