The UAE's private security sector has grown considerably over the past decade. Mahmood Mohammed Amin is the chief executive of World Security, a business unit of Dubai World whose clients include Dubai Customs and Emaar Properties. Mr Amin talks about how this market has shifted with the country's growth, increased piracy at sea and the challenges ahead.
How fast is the sector growing?
The private security sector is growing more than what was expected. It's not only a man guarding a place; it's about the whole security system, which can be controlled through, say, the internet.
What changes have been made among private security guards to combat sea piracy in the region?
Piracy is far away from our side, but we have procedures for the ships coming to our ports. They have to be registered with the International Maritime Organization, follow International Ship and Port Facility Security Code, declare what they are carrying, and how many armed or unarmed guards they have on board. There has been a 30 per cent increase in the number of armed guards on board merchant ships over the last five years.
How would you compare the nature of private security companies that are locally versus foreign-owned?
Dubai security market has attracted many companies, ranging from small, watchman providers to large multinational companies. The difference is local companies may have the advantage of better understanding the culture and the security requirement of local businesses and consumers.
How do you recruit and train people for the job?
Recruitment depends on the area of security requirement. For instance, we will recruit men with experience in hotel security for the job. A director from the specific department will go to the country [of prospective candidates], take writing tests, get home-city security clearance [and] our national security clearance. [Then] they will be fingerprinted, trained and get licensed from Dubai Police, trained on site itself and provided to the client.
How much does the culture of a region affect the training of the staff?
Language is the most important requirement. Private security personnel must know English and have a minimum two years experience in the area of security. They also have to have a little bit of Arabic background or we try to teach them about the culture in the UAE, the religion, other religions, what is allowed and not allowed.
How has the Arab Spring affected business?
Honestly, there was no effect, because we are 100 per cent locally owned and our operation is inside the UAE.
What are the challenges in this sector?
The challenge is creating awareness about the role of security among executives and society, awareness about price sensitivity in comparison to the quality provided, and increasing demand on security and the ability to meet the market requirement. There are residential security systems available, but only 2 per cent of the Dubai residents use them.
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Classification of skills
A worker is categorised as skilled by the MOHRE based on nine levels given in the International Standard Classification of Occupations (ISCO) issued by the International Labour Organisation.
A skilled worker would be someone at a professional level (levels 1 – 5) which includes managers, professionals, technicians and associate professionals, clerical support workers, and service and sales workers.
The worker must also have an attested educational certificate higher than secondary or an equivalent certification, and earn a monthly salary of at least Dh4,000.
Uefa Nations League: How it works
The Uefa Nations League, introduced last year, has reached its final stage, to be played over five days in northern Portugal. The format of its closing tournament is compact, spread over two semi-finals, with the first, Portugal versus Switzerland in Porto on Wednesday evening, and the second, England against the Netherlands, in Guimaraes, on Thursday.
The winners of each semi will then meet at Porto’s Dragao stadium on Sunday, with the losing semi-finalists contesting a third-place play-off in Guimaraes earlier that day.
Qualifying for the final stage was via League A of the inaugural Nations League, in which the top 12 European countries according to Uefa's co-efficient seeding system were divided into four groups, the teams playing each other twice between September and November. Portugal, who finished above Italy and Poland, successfully bid to host the finals.
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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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