Abu Dhabi's economy grew by 10.5 per cent on an annual basis in the first nine months of 2022. Khushnum Bhandari / The National
Abu Dhabi's economy grew by 10.5 per cent on an annual basis in the first nine months of 2022. Khushnum Bhandari / The National
Abu Dhabi's economy grew by 10.5 per cent on an annual basis in the first nine months of 2022. Khushnum Bhandari / The National
Abu Dhabi's economy grew by 10.5 per cent on an annual basis in the first nine months of 2022. Khushnum Bhandari / The National

Business

Economy

Abu Dhabi to host a key investment forum amid diversification efforts

Aim 2023 will focus on how countries can achieve economic growth through sustainable investments

Fareed Rahman
Fareed Rahman

March 21, 2023

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Abu Dhabi will host a key investment forum in May as the emirate focuses on attracting more foreign direct investment and diversifying its economy away from oil.

The Annual Investment Meeting will be held from May 8 to 10 and will host discussions on how to better use innovation to augment investment in companies, encourage technology transfers and boost competitiveness, organisers said on Tuesday.

The event aims to help countries to achieve economic growth through sustainable investments.

Abu Dhabi is hosting Aim for the first time, supported by the Ministry of Industry and Advanced Technology in partnership with the Abu Dhabi Department of Economic Development.

The move is aligned with the emirate’s “efforts to further strengthen its economic position in the region and to promote foreign direct investments among the countries of the world", organisers said.

“The event provides businessmen and investors with the opportunity to meet, establish strategic agreements and partnerships, expand their businesses and introduce new channels of work that are offered by the available investment sectors that are abundant in the emirate of Abu Dhabi and the entire United Arab Emirates,” said Aim chairman Dawood Al Shezawi.

Abu Dhabi's economy grew by 10.5 per cent on an annual basis in the first nine months of 2022, the fastest expansion in the Mena region, driven by strong growth in the non-oil sector, according to government data.

The non-oil sector grew by 10.3 per cent annually, driven by government efforts to diversify the economy, boost the private sector's contribution and invest in human capital, the Abu Dhabi Media Office said last month, citing the latest data released by the Statistics Centre Abu Dhabi.

Abu Dhabi has unveiled several initiatives, including a new industrial strategy to boost the contribution of the sector to the overall economy.

A number of conferences will be held at the same time as Aim, organisers said.

They include Make it in the Emirates, Invest in Abu Dhabi, Road to the World Investment Forum, which is being held in collaboration with the UN Conference on Trade and Development, and Entrepreneurs Investment Forum, which is being held together with the UN Industrial Development Organisation.

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Lt Gen Erik Petersen, deputy chief of programs, US Army, has argued it took a “three decade holiday” on modernising tanks. 

“There clearly remains a significant armoured heavy ground manoeuvre threat in this world and maintaining a world class armoured force is absolutely vital,” the general said in London last week.

“We are developing next generation capabilities to compete with and deter adversaries to prevent opportunism or miscalculation, and, if necessary, defeat any foe decisively.”

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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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The specs

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Power: 503hp at 6,000rpm

Torque: 685Nm at 2,000rpm

Transmission: 8-speed auto

Price: from Dh850,000

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