Fortress Investment Group, backed by the UAE’s Mubadala Investment Company, is “actively” looking to expand across the Middle East, with potential investments in sectors such as energy, real estate and finance, a senior executive said on Thursday.
“Historically, we didn't focus much on making investments here [the Middle East], but I think things are changing. We are looking at several things that could be of interest, the market is now mature to attract foreign capital,” said Francesco Colasanti, co-head of Europe at Fortress Investment Group.
The New York-based investment firm, which manages assets worth $49 billion, is now “actively looking at the easiest sectors to enter, [in the region including] energy, real estate and financials”, Mr Colasanti told The National on the sidelines of the Milken Institute Middle East and Africa Summit in Abu Dhabi.
The Middle East's initial public offering boom is likely to continue as energy prices remain high, especially with markets such as Europe capable of absorbing significant price shocks, he said.
There has been a flurry of listings in Dubai, Abu Dhabi and Riyadh in the past two years on the back of a push from governments to boost liquidity as well as growing investor demand.
Brent crude, the benchmark for two thirds of the world’s oil, surged to nearly $140 a barrel following Russia’s invasion of Ukraine in 2022. The jump in oil prices significantly boosted the economies of Middle Eastern crude-producing nations, with Saudi Arabia and the UAE recording some of the fastest gross domestic product (GDP) growth rates that year.
In 2023, Mubadala, Abu Dhabi’s strategic investment arm, announced the acquisition of a majority stake in Fortress. The deal closed in May this year.
Earlier this year, Fortress invested $100 million in British semiconductor company Imagination Technologies Group, expanding its footprint in the sector being fuelled by artificial intelligence.
Europe lags
However, Mr Colasanti has a bleak outlook on Europe’s economic prospects, pointing to slowing growth, political instability, rigid labour markets, and the risk of "higher-for-longer" inflation, driven by US president-elect Donald Trump’s proposed tariff policies.
“I'm not very positive about Europe, because when I look at the fundamentals, GDP is not growing,” Mr Colasanti said.
"Germany, the locomotive of Europe, is slowing down. Normally, when Germany slows down, everyone slows down. France [is going through] a very heavy political [and] economic issue," he added.
Germany and France, the economic powerhouses of the EU, have faced numerous challenges in the past year, including domestic political disputes, high levels of debt, and sluggish investment.
On Wednesday, the Organisation for Economic Co-operation and Development (OECD) lowered its economic growth projections for both countries.
Germany's expected growth for next year has been reduced to 0.7 per cent from 1.1 per cent, while France's projected growth has been cut to 0.9 per cent from 1.2 per cent.
Germany, France, and Italy have the “most rigid labour markets in the world", making it difficult for companies to right-size their businesses, Mr Colasanti said.
He also warned that a trade war could prolong inflation, forcing the European Central Bank to maintain higher interest rates for an extended period.
“All of these tensions will create moments of dislocation, and that's what investors like us are focused on in specific moments in time,” Mr Colasanti said.
Europe will eventually bounce back, but it will require structural changes, including reforming labour laws to retain or attract talent in the technology sector, the formation of Eurobonds, and common defence procurement, he added.
Jeff Buckley: From Hallelujah To The Last Goodbye
By Dave Lory with Jim Irvin
Yuki Means Happiness
Alison Jean Lester
John Murray
What vitamins do we know are beneficial for living in the UAE
Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.
Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.
Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.
Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.
Brief scores:
Day 2
England: 277 & 19-0
West Indies: 154
The specs: Rolls-Royce Cullinan
Price, base: Dh1 million (estimate)
Engine: 6.75-litre twin-turbo V12
Transmission: Eight-speed automatic
Power: 563hp @ 5,000rpm
Torque: 850Nm @ 1,600rpm
Fuel economy, combined: 15L / 100km
Meydan Racecourse racecard:
6.30pm: The Madjani Stakes Listed (PA) | Dh175,000 | 1,900m
7.05pm: Maiden for 2-year-old fillies (TB) | Dh165,000 | 1,400m
7.40pm: The Dubai Creek Mile Listed (TB) | Dh265,000 | 1,600m
8.15pm: Maiden for 2-year-old colts (TB) | Dh165,000 | 1,600m
8.50pm: The Entisar Listed (TB) | Dh265,000 | 2,000m
9.25pm: Handicap (TB) | Dh190,000 | 1,200m
10pm: Handicap (TB) | Dh190,000 | 1,600m.
Hydrogen: Market potential
Hydrogen has an estimated $11 trillion market potential, according to Bank of America Securities and is expected to generate $2.5tn in direct revenues and $11tn of indirect infrastructure by 2050 as its production increases six-fold.
"We believe we are reaching the point of harnessing the element that comprises 90 per cent of the universe, effectively and economically,” the bank said in a recent report.
Falling costs of renewable energy and electrolysers used in green hydrogen production is one of the main catalysts for the increasingly bullish sentiment over the element.
The cost of electrolysers used in green hydrogen production has halved over the last five years and will fall to 60 to 90 per cent by the end of the decade, acceding to Haim Israel, equity strategist at Merrill Lynch. A global focus on decarbonisation and sustainability is also a big driver in its development.
Zayed Sustainability Prize
Brief scores:
Newcastle United 1
Perez 23'
Wolverhampton Rovers 2
Jota 17', Doherty 90' 4
Red cards: Yedlin 57'
Man of the Match: Diogo Jota (Wolves)
Fight card
- Aliu Bamidele Lasisi (Nigeria) beat Artid Vamrungauea (Thailand) POINTS
- Julaidah Abdulfatah (Saudi Arabia) beat Martin Kabrhel (Czech Rep) POINTS
- Kem Ljungquist (Denmark) beat Mourad Omar (Egypt) TKO
- Michael Lawal (UK) beat Tamas Kozma (Hungary) KO
- Zuhayr Al Qahtani (Saudi Arabia) beat Mohammed Mahmoud (UK) POINTS
- Darren Surtees (UK) beat Kane Baker (UK) KO
- Chris Eubank Jr (UK) beat JJ McDonagh (Ireland) TKO
- Callum Smith (UK) beat George Groves (UK) KO
'How To Build A Boat'
Jonathan Gornall, Simon & Schuster
Small%20Things%20Like%20These
%3Cp%3EDirector%3A%20Tim%20Mielants%3Cbr%3ECast%3A%20Cillian%20Murphy%2C%20Emily%20Watson%2C%20Eileen%20Walsh%3Cbr%3ERating%3A%204%2F5%3C%2Fp%3E%0A
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.”
What is Genes in Space?
Genes in Space is an annual competition first launched by the UAE Space Agency, The National and Boeing in 2015.
It challenges school pupils to design experiments to be conducted in space and it aims to encourage future talent for the UAE’s fledgling space industry. It is the first of its kind in the UAE and, as well as encouraging talent, it also aims to raise interest and awareness among the general population about space exploration.
How to register as a donor
1) Organ donors can register on the Hayat app, run by the Ministry of Health and Prevention
2) There are about 11,000 patients in the country in need of organ transplants
3) People must be over 21. Emiratis and residents can register.
4) The campaign uses the hashtag #donate_hope
Batti Gul Meter Chalu
Producers: KRTI Productions, T-Series
Director: Sree Narayan Singh
Cast: Shahid Kapoor, Shraddha Kapoor, Divyenndu Sharma, Yami Gautam
Rating: 2/5
