Abu Dhabi company to help at Haj



An Abu Dhabi helicopter company will be sent to the front lines of the humanitarian efforts for the Haj pilgrimage in Saudi Arabia, one of the world's most challenging annual logistical endeavours. Abu Dhabi Aviation, the Middle East's largest operator of helicopters, yesterday signed an Dh80 million (US$21.7m) deal with the Saudi Red Crescent Authority to provide six fully crewed air ambulances.

Abu Dhabi Aviation said the contract, for one year, would involve providing medical assistance during the pilgrimage to Mecca, which draws about 2 million foreign visitors a year. The four Bell 412 and two AgustaWestland 139 helicopters "will play a critical role in providing medical assistance to those visiting Mecca during the busy Ramadan and Haj period", the company said yesterday. The week-long event is the largest pilgrimage in the world and organising such a huge influx of visitors each year has pushed Saudi authorities to the limit. This year, Haj is expected to begin in mid-November.

But tragedy has struck in the past. In 2006, more than 340 pilgrims were crushed to death, and 251 died during the 2004 pilgrimage. The helicopters will this year provide the Saudi humanitarian organisation with added emergency response capabilities. Sheikh Hamdan bin Mubarak Al Nahyan, the vice chairman of Abu Dhabi Aviation, said he was happy his organisation had formed the partnership with the Saudi medical services group.

"We are pleased that we are able to provide our expertise in such a worthy field and we applaud the good work of Saudi Red Crescent Authority," Sheikh Hamdan said. Abu Dhabi Aviation operates a fleet of more than 50 helicopters and aeroplanes, and has signed deals to operate its helicopters on long-term contracts around the world, particularly with oil and gas companies for offshore oil rig work. The helicopters have been used in Qatar, Kuwait, Oman, Yemen, Spain, Pakistan and Eritrea, as well as Brazil, Papua New Guinea, Indonesia and Australia.

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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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