ADIA is on board for British rail bid

The Abu Dhabi Investment Authority (ADIA) is a member of a consortium looking to buy the British high-speed Channel Tunnel rail link, it emerged yesterday. According to reports in the UK media, ADIA has joined forces with British infrastructure investment funds to take part in the auction of High Speed 1, which owns the railway stations and track connecting London with the Channel Tunnel to France.

The project has been earmarked for privatisation by successive UK governments and was recently confirmed for sale by the UK's coalition administration. The price tag is reported to be between £1.5 billion (Dh8.64bn) and £2bn. ADIA declined to comment on the report, but a source close to the sale process in London confirmed the Abu Dhabi sovereign wealth fund was involved in one of the consortiums interested in High Speed 1. ADIA's involvement is said to be "at a very early stage".

Its partners in the consortium are believed to be 3i, the British private equity group, and Morgan Stanley, the Wall Street investment bank. In what insiders call a "very competitive process", the ADIA consortium will face opposition from Eurotunnel, the company that operates the tunnel itself. Eurotunnel has joined with the US investment bank Goldman Sachs and Infracapital, an infrastructure fund.

"There has been wide interest from around the world. This is a good time to be selling infrastructure assets as there are not a lot of large projects completed and for sale," said the person familiar with the sale process. The track, which links St Pancras station in London to the Channel Tunnel entrance at Folkestone, took nine years to build and was opened in 2007. It was the first new rail line in the UK for more than a century.

Potential bidders in the auction, which is being run by the Swiss bank UBS, have completed a pre-qualification questionnaire. UBS hopes to have all bids in ahead of a deadline of August 17, and to be able to announce a preferred bidder by the autumn. High Speed 1 is owned by its constructor, London & Continental Railways, which is itself owned 100 per cent by the British government. ADIA's interest in infrastructure assets was underlined earlier this year with the purchase of a 15 per cent stake in London's Gatwick Airport. It was also a bidder in the recent auction of UK electricity interests sold to businesses of the Hong Kong tycoon Li Ka-shing.

fkane@thenational.ae

The Sand Castle

Director: Matty Brown

Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea

Rating: 2.5/5

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6.35pm: Festival City Stakes – Conditions (TB) $60,000 (D) 1,200m
7.10pm: Dubai Racing Club Classic – Listed (TB) $100,000 (Turf) 2,410m
7.45pm: Jumeirah Classic Trial – Conditions (TB) $150,000 (T) 1,400m
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9.30pm: Dubai Dash – Listed (TB) $100,000 (T) 1,000m

'The Woman in the House Across the Street from the Girl in the Window'

Director:Michael Lehmann

Stars:Kristen Bell

Rating: 1/5

Teams in the EHL

White Bears, Al Ain Theebs, Dubai Mighty Camels, Abu Dhabi Storms, Abu Dhabi Scorpions and Vipers

Match statistics

Dubai Sports City Eagles 8 Dubai Exiles 85

Eagles
Try: Bailey
Pen: Carey

Exiles
Tries: Botes 3, Sackmann 2, Fourie 2, Penalty, Walsh, Gairn, Crossley, Stubbs
Cons: Gerber 7
Pens: Gerber 3

Man of the match: Tomas Sackmann (Exiles)

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The Settlers

Director: Louis Theroux

Starring: Daniella Weiss, Ari Abramowitz

Rating: 5/5

Types of fraud

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Vishing: The telephone equivalent of phishing and smishing. Fraudsters may pose as bank staff, police or government officials. They may persuade the consumer to transfer money or divulge personal information.

SIM swap: Fraudsters duplicate the SIM of your mobile number without your knowledge or authorisation, allowing them to conduct financial transactions with your bank.

Identity theft: Someone illegally obtains your confidential information, through various ways, such as theft of your wallet, bank and utility bill statements, computer intrusion and social networks.

Prize scams: Fraudsters claiming to be authorised representatives from well-known organisations (such as Etisalat, du, Dubai Shopping Festival, Expo2020, Lulu Hypermarket etc) contact victims to tell them they have won a cash prize and request them to share confidential banking details to transfer the prize money.

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Price, base: Dh228,000 / Dh232,000 (est)
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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.”