Jassim Alseddiqi the chief executive of Abu Dhabi Financial Group, says his engineer training has helped him in an industry that he says sometimes relies on projections rather than facts. Christopher Pike / The National
Jassim Alseddiqi the chief executive of Abu Dhabi Financial Group, says his engineer training has helped him in an industry that he says sometimes relies on projections rather than facts. Christopher Show more

Abu Dhabi Financial Group head has shrewd eye for a good buy



Jassim Alseddiqi says he is not a risk-taker even after closing two of the biggest central London property deals of the past year at what could be the peak of the market.

Is he worried he paid too much for the trophy assets of No 1 Palace Street and New Scotland Yard?

“I’ll tell you in two years,” smiles the engineer turned investor who runs Abu Dhabi Financial Group. If he is worried, it doesn’t show.

The two sites are among the most prized in central London, where until now it has been Qatari investors who have dominated the big ticket purchases from The Shard to Harrods.

If you can stump up as much as £60 million (Dh332m) needed to buy a penthouse at No 1 Palace Street, your nearest neighbour could be the Queen. Down the road in Victoria, the revolving sign outside New Scotland Yard has been a fixture of TV crime capers and films for decades.

Iconic buildings come with iconic price tags

“Today you cannot buy something so valuable and so unique without a premium,” says Mr Alseddiqi. “What we paid for it is its value.”

While London homes have added about £500 billion in value over the past five years, many analysts believe the party is over — especially at the luxury end of the market, which recorded some of the biggest gains.

But that has not diminished Mr Alseddiqi’s long-term faith in the market.

“It’s tough to say whether it’s the right time to buy or not. It is if you are a long-term investor but not if you are a flipper.”

Still, ADFG is unlikely to follow up its two trophy purchases in Victoria with any more acquisitions in the near future. Instead, it will focus on opportunistic investments in the UAE such as a planned US$100m acquisition of a financial services company which it is currently assessing.

“In central London we are delivering about $3bn of inventory over the next five years between all our projects. I don’t see that we will invest in another project any time soon.”

Abu Dhabi Financial Group was created in the depths of the global financial crisis and has reaped the benefits of the recovery, achieving an average internal rate of return of about 26 per cent since it started operation in 2011.

“We extract value. We find niches. We are opportunistic,” he says. “It’s hard for us to find a good deal but that’s why our returns are so high.”

It operates through six units which include Abu Dhabi Capital Management, Spadille and Qannas Investments.

Employing something of the Warren Buffett maxim of being fearful when others are greedy and greedy when others are fearful, ADFG was quick to reap the investment opportunities arising across the region as the Arab Spring and global financial crisis combined to weaken asset prices and scare investors.

He recalls: “Four years ago we were the only ones investing. We deployed around $50m buying stakes in Middle Eastern companies when everyone was sitting back watching what was happening.”

While the rapidly developing alternative investment space is considered by some as inhabiting the riskier neighbourhoods of the financial world, Mr Alseddiqi disagrees.

“I don’t think it’s fair to say we are risk-takers. On the contrary if you look at our investments, we don’t take a lot of risk.

“If we were risk-takers we would have been hit with the Swiss franc crisis, the oil crisis or the equities crisis.”

He points out that the company exited its UAE real estate investments a year ago.

ADFG’s debt and property platforms have generated handsome returns for the company since its formation four years ago.

“Companies usually come to us when they have exhausted options with banks or when they need more than the banks offer — this is where we excel. Today, markets are risk-averse or are turning risk-averse, but where you get your alpha return is in alternative debt rather than equity investments.”

Mr Alseddiqi is sanguine about the likely impact of the tumbling price of oil on either the ADFG business model or the UAE property market and wider economy.

He points out that much of the company’s investments are in countries whose economies could benefit from cheaper oil, but acknowledges there will be an impact in the UAE.

Even amid predictions last week from the S&P ratings agency that Dubai property prices could lose as much as 20 per cent this year, he believes most of the excessive leverage that exaggerated the previous property crash has been purged from the system.

“It’s not the first time oil has dropped,” he says. “This always happens in cycles and you cannot have a high oil price for a long time. As we approach 2020, real estate and hospitality assets will improve — it’s only five years away.

Mr Alseddiqi graduated as an electrical engineer and fell into a financial career in what he describes as fluke.

He says his engineer training has helped him in an industry that he says sometimes relies on projections rather than facts.

“It changes the way you analyse a pitch. Projections are not facts, they are based on assumptions,” he says.

While last year was all about announcing big plans in central London, the group will be looking to emerging opportunities in eastern Europe in the year ahead.

It plans to invest up to €200m (Dh829m) over the next two years in the region, which could rise to as much as €500m by the end of the decade.

The markets may be very different, but he says his approach will be the same — seeking out opportunities, not risks.

“It is about investing in quality deals, not quality assets,” he says. “There is a difference.”

scronin@thenational.ae

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Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
 
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
 
Round 3: February 7-9, Dubai Autodrome – Dubai
 
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
 
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia

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.”

RACECARD
%3Cp%3E%0D%3Cstrong%3E6pm%3A%3C%2Fstrong%3E%20Abu%20Dhabi%20Land%20Forces%20-%20Maiden%20(TB)%20Dh82%2C500%20(Dirt)%201%2C200m%0D%3Cbr%3E%3Cstrong%3E6.35pm%3A%20%3C%2Fstrong%3EDubai%20Naval%20Forces%20-%20Maiden%20(TB)%20Dh82%2C500%20(D)%201%2C400m%0D%3Cbr%3E%3Cstrong%3E7.10pm%3A%3C%2Fstrong%3E%20Sharjah%20Air%20Force%20-%20Maiden%20(TB)%20Dh82%2C500%20(D)%201%2C200m%0D%3Cbr%3E%3Cstrong%3E7.45pm%3A%20%3C%2Fstrong%3EAjman%20Presidential%20Guard%20-%20Handicap%20(TB)%20Dh95%2C000%20(D)%201%2C200m%0D%3Cbr%3E%3Cstrong%3E8.20pm%3A%3C%2Fstrong%3E%20Dubai%20Creek%20Mile%20%E2%80%93%20Listed%20(TB)%20Dh132%2C500%20(D)%201%2C600m%0D%3Cbr%3E%3Cstrong%3E8.55pm%3A%20%3C%2Fstrong%3EUmm%20Al%20Quwain%20and%20Ras%20Al%20Khaimah%20Joint%20Aviation%20-%20Rated%20Conditions%20(TB)%20Dh95%2C000%20(D)%201%2C600m%0D%3Cbr%3E%3Cstrong%3E9.30pm%3A%3C%2Fstrong%3E%20Fujairah%20National%20Service%20and%20Reserve%20-%20Handicap%20(TB)%20Dh82%2C500%20(D)%201%2C400m%3C%2Fp%3E%0A
Pakistanis%20at%20the%20ILT20%20
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German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

Source: Federal Office for the Protection of the Constitution

SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20S24%20ULTRA
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Other workplace saving schemes
  • The UAE government announced a retirement savings plan for private and free zone sector employees in 2023.
  • Dubai’s savings retirement scheme for foreign employees working in the emirate’s government and public sector came into effect in 2022.
  • National Bonds unveiled a Golden Pension Scheme in 2022 to help private-sector foreign employees with their financial planning.
  • In April 2021, Hayah Insurance unveiled a workplace savings plan to help UAE employees save for their retirement.
  • Lunate, an Abu Dhabi-based investment manager, has launched a fund that will allow UAE private companies to offer employees investment returns on end-of-service benefits.

The Beach Bum

Director: Harmony Korine

Stars: Matthew McConaughey, Isla Fisher, Snoop Dogg

Two stars

RESULT

Everton 2 Huddersfield Town 0
Everton: 
Sigurdsson (47'), Calvert-Lewin (73')

Man of the Match: Dominic Calvert-Lewin (Everton)

Game Changer

Director: Shankar 

Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram

Rating: 2/5

MATCH INFO

Quarter-finals

Saturday (all times UAE)

England v Australia, 11.15am 
New Zealand v Ireland, 2.15pm

Sunday

Wales v France, 11.15am
Japan v South Africa, 2.15pm

How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

Arabian Gulf Cup FINAL

Al Nasr 2

(Negredo 1, Tozo 50)

Shabab Al Ahli 1

(Jaber 13)

COMPANY PROFILE
Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Classification from Tour de France after Stage 17

1. Chris Froome (Britain / Team Sky) 73:27:26"

2. Rigoberto Uran (Colombia / Cannondale-Drapac) 27"

3. Romain Bardet (France / AG2R La Mondiale)

4. Fabio Aru (Italy / Astana Pro Team) 53"

5. Mikel Landa (Spain / Team Sky) 1:24"

Vidaamuyarchi

Director: Magizh Thirumeni

Stars: Ajith Kumar, Arjun Sarja, Trisha Krishnan, Regina Cassandra

Rating: 4/5

 

MATCH INFO

Liverpool 2 (Van Dijk 18', 24')

Brighton 1 (Dunk 79')

Red card: Alisson (Liverpool)

if you go
Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
Director: Venkat Prabhu
Rating: 2/5
Sarfira

Director: Sudha Kongara Prasad

Starring: Akshay Kumar, Radhika Madan, Paresh Rawal 

Rating: 2/5

UAE jiu-jitsu squad

Men: Hamad Nawad and Khalid Al Balushi (56kg), Omar Al Fadhli and Saeed Al Mazroui (62kg), Taleb Al Kirbi and Humaid Al Kaabi (69kg), Mohammed Al Qubaisi and Saud Al Hammadi (70kg), Khalfan Belhol and Mohammad Haitham Radhi (85kg), Faisal Al Ketbi and Zayed Al Kaabi (94kg)

Women: Wadima Al Yafei and Mahra Al Hanaei (49kg), Bashayer Al Matrooshi and Hessa Al Shamsi (62kg)

Emergency

Director: Kangana Ranaut

Stars: Kangana Ranaut, Anupam Kher, Shreyas Talpade, Milind Soman, Mahima Chaudhry 

Rating: 2/5

UAE currency: the story behind the money in your pockets
Results

4pm: Al Bastakiya Listed US$300,000 (Dirt) 1,900m; Winner: Emblem Storm, Oisin Murphy (jockey), Satish Seemar (trainer).

4.35pm: Mahab Al Shimaal Group 3 $350,000 (D) 1,200m; Winner: Wafy, Tadhg O’Shea, Satish Seemar.

5.10pm: Nad Al Sheba Turf Group 3 $350,000 (Turf) 1,200m; Winner: Wildman Jack, Fernando Jara, Doug O’Neill.

5.45pm: Burj Nahaar Group 3 $350,000 (D) 1,600m; Winner: Salute The Soldier, Adrie de Vries, Fawzi Nass.

6.20pm: Jebel Hatta Group 1 $400,000 (T) 1,800m; Winner: Barney Roy, William Buick, Charlie Appleby.

6.55pm: Al Maktoum Challenge Round-3 Group 1 $600,000 (D) 2,000m; Winner: Matterhorn, Mickael Barzalona, Salem bin Ghadayer.

7.30pm: Dubai City Of Gold Group 2 $350,000 (T) 2,410m; Winner: Loxley, Mickael Barzalona, Charlie Appleby.