UK to host second Global Investment Summit

The second Global Investment Summit will take place in the autumn, British Prime Minister Rishi Sunak is expected to announce on Friday.

The October summit will be a chance for the UK government to deliver on “our ambition to be a world-leading destination for international finance and investment”, Mr Sunak will tell global investors.

More than 200 of the world’s highest-profile investors, chief executives and financiers will be invited to the UK gathering, the Department for Business and Trade said.

It follows a similar event focused on green investment that was held in 2021 in the lead-up to the Cop26 climate summit in Glasgow.

The department said the day-long event secured £9.7 billion ($11.7 billion) of foreign investment and helped to create more than 30,000 jobs.

The money pledged also supported growth in sectors such as wind and hydrogen energy, sustainable homes, and carbon capture and storage, officials said.

Mr Sunak is due to confirm the second summit at a meeting of the Investment Council on Friday, where he will address global investors to set out his priorities for creating jobs and growing the economy.

“This week we drove serious change from the heart of government by creating four new departments," he said.

“This was done to deliver on the promises and priorities of the British people, and to go further and faster on our ambition to drive jobs and growth in every part of the UK, and ensure we are at the cutting edge of technology and innovation.

“The next Global Investment Summit is an opportunity to demonstrate what we can do as a nation, delivering on our ambition to be a world-leading destination for international finance and investment.”

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Business and Trade Secretary Kemi Badenoch said: “Investment creates high-quality jobs and grows our economy.

“I started the year setting a goal of the UK becoming the undisputed number one investment destination in Europe.

“Events like this will help deliver this and show the world’s biggest investors just what a strong investment prospect the UK can offer.”

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.”

UK to host second Global Investment Summit

Summit will be 'an opportunity to demonstrate what we can do as a nation', Prime Minister Rishi Sunak will say

Can Rishi Sunak tame the UK economy? - Business Extra podcast