The silk used for making Hermès neckties is sourced from Lyon. Philippe Desmazes / AFP
The silk used for making Hermès neckties is sourced from Lyon. Philippe Desmazes / AFP
The silk used for making Hermès neckties is sourced from Lyon. Philippe Desmazes / AFP
The silk used for making Hermès neckties is sourced from Lyon. Philippe Desmazes / AFP

Dubai air link raises Lyon's profile


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Lyon is burdened with the - perhaps unfair - assumption that it suffers from an inferiority complex vis-a-vis Paris.

But the city's international credentials have been given a boost after Emirates Airline selected the city as a new European destination. Lyon fought off competition from Marseille and Toulouse in France, as well as other European cities, and from December 5 flights will run five times a week.

Stéphane Geffroy, a sales and marketing director at Aéroports de Lyon, expects that 80 per cent to 85 per cent of passengers will come from and continue on beyond Dubai, opening up the region to Asia.

OnlyLyon, the organisation that markets Lyon internationally, is seeking to demonstrate that for business and leisure, the city provides the best France has to offer.

It is a little known fact that Lyon attracts the most foreign direct investment in Europe after London and Paris. It is home to 150 international companies and has carved out a niche for itself in the biotech and clean sciences sector. Sanofi Pasteur and Merial, the vaccine and animal health arms of Sanofi-Aventis, are headquartered in Lyon, while the French Institute of Petroleum also has a presence there.

Lyon is strong in three other sectors: trucks, functional textiles and digital imaging and entertainment.

"We want to attract investors and companies especially in these sectors," said Lionel Flasseur, the manager of OnlyLyon.

A selection of the world's best architects are also working on what is the greatest urban development project in Europe in terms of size. Currently, company headquarters account for 1 million square metres of space in the city, but developers want to double that. But rather than create a high-rise business ghetto such as La Défense in Paris, Lyon's planners have opted to keep a mix between work and life.

"We didn't want to create a quarter like in Paris. La Defense is only for business and after 8 o'clock there is nobody," said Mr Flasseur.

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New Zealand 57-0 South Africa

Tries: Rieko Ioane, Nehe Milner-Skudder (2), Scott Barrett, Brodie Retallick, Ofa Tu'ungfasi, Lima Sopoaga, Codie Taylor. Conversions: Beauden Barrett (7). Penalty: Beauden Barrett

MATCH INFO

Uefa Champions League final:

Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports

A Prayer Before Dawn

Director: Jean-Stephane Sauvaire

Starring: Joe Cole, Somluck Kamsing, Panya Yimmumphai

Three stars

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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.”