UAE's e& acquires 10% stake in South Korea's Bespin Global for $60m

The UAE’s biggest telecoms operator e& — formerly known as Etisalat — has invested $60 million in South Korea’s cloud management company Bespin Global for a 10 per cent stake and also formed a joint venture company that will provide public cloud services in the region.

Originally announced in December, the new company is known as Bespin Global MEA. It will be 65 per cent owned by e& enterprise, a part of e&, and 35 per cent owned by Bespin Global.

It will offer “public cloud managed and professional services in the Middle East, Turkey, Africa and Pakistan”, e& said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

“In addition, e& invested $60 million in Bespin Global in exchange for a stake of circa 10 per cent … the JV will be accounted for as a subsidiary of e&, effective from May 2023,” it added.

In the cloud industry, businesses pay only for those selective services or resources they use over a period of time.

The adoption of cloud technology is expected to add $181 billion in economic value to the UAE over the next decade, according to a report commissioned by Amazon Web Services. That is equal to 2.5 per cent of the Emirates’ economy.

Nearly 1 per cent increase in cloud adoption by UAE organisations will result in a 0.21 per cent or $854.7 million average gross domestic product growth, which is three times the Middle East and North Africa average and the highest in the region, the report added.

Abu Dhabi-based e& was founded in 1976 and is the UAE's oldest telecoms company. It has operations in about 16 countries across the Middle East, Asia and Africa.

It recorded a net profit of Dh2.19 billion ($599 million) in the first quarter of 2023 as its subscriber base grew.

The company is expanding its presence and has been on an acquisition spree.

Last month, it signed a $400 million deal to acquire a majority stake in Careem’s Super App spin-off from Uber as part of efforts to expand its consumer digital offerings.

This year, e& increased its stake in Vodafone Group to 14 per cent as it continues to consolidate its shareholding in the British company as part of its international expansion plans.

The Old Slave and the Mastiff

Patrick Chamoiseau

Translated from the French and Creole by Linda Coverdale

Company profile

Name: Steppi

Founders: Joe Franklin and Milos Savic

Launched: February 2020

Size: 10,000 users by the end of July and a goal of 200,000 users by the end of the year

Employees: Five

Based: Jumeirah Lakes Towers, Dubai

Financing stage: Two seed rounds – the first sourced from angel investors and the founders' personal savings

Second round raised Dh720,000 from silent investors in June this year

At Everton Appearances: 77; Goals: 17

At Manchester United Appearances: 559; Goals: 253

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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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