Smart art

Try to become a collector and not an investor in art. This will always pay off in the long run. I always get asked which artist is a good investment; that is not the main criteria if one is collecting. I always try to buy the best work by an artist I can afford within my budget. Research artists, their CVs, where they are going and how they are they evolving, and enjoy the work, try to live with it. If it increases in value as good-quality art always does, you will have made a good investment.

Integrity and honesty is always the best policy. In the art world these days, with so many fakes, there are a lot of people out there taking advantage of artists or new collectors. They think they can make big money in the short term, but in the long run reputation in the art world is all that you have. Without that no matter how much knowledge or contacts you have your career will be a short one.

The art world is not always glamorous. People always see you at previews and art fairs and think being in the art world means attending one party after another, but it is a gruelling schedule of deadlines, travel and lifting heavy paintings full of spider's webs. It takes years of underpaid training jobs to get to a specialist level. Guilt can take away the pleasure of being a parent. I have to learn to stop feeling guilty about not being with my children all the time and dedicating my life to them like other mothers. I'm working on that lesson of balancing career with the most important job in the world - being a mum.

Thank God for the tiny pleasures of life, such as getting a wet kiss on the nose from your three-year old trying to wake you up at 5am at the weekend. Bonhams Modern and Contemporary Middle Eastern, Iranian and South East Asian art auction, Monday, October 11 One & Only Royal Mirage, Dubai.

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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Mehreen Rizvi Khursheed, 42, is head of Middle Eastern and Southern Asian art at Bonhams in London, and has helped bring many Indian and Pakistani artists to international attention.

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