Facebook opened its new London office on Monday and said it would add another 800 jobs in the capital next year, underlining its commitment to Britain as the country prepares for Brexit.
The investment, which makes London the biggest engineering hub for Facebook outside the United States, was welcomed by finance minister Philip Hammond, who was given a tour of the new building located off the main shopping thoroughfare of Oxford Street.
“It’s a sign of confidence in our country that innovative companies like Facebook invest here,” he said.
Facebook announced the new investment in November last year, shortly after Google said it was building a new hub in the city that will be able to accommodate more than 7,000 employees in total.
The twin announcements were seen as a vote of confidence in London’s future as a technological hub despite the decision to leave the European Union which has thrown Britain’s future trading relationships into doubt.
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“The UK’s flourishing entrepreneurial ecosystem and international reputation for engineering excellence makes it one of the best places in the world to build a tech company,” EMEA vice president Nicola Mendelsohn said.
“And we’ve built our company here - this country has been a huge part of Facebook’s story over the past decade, and I look forward to continuing our work to achieve our mission of bringing the world closer together.”
The site will also house Facebook’s first in-house start-up incubator, called LDN_LAB, designed to help kick start fledgling British digital businesses.
“The emphasis on engineering and the 800 new jobs being created shows London remains at the forefront of global innovation,” London Mayor Sadiq Khan said in a statement.
“What’s more, the launch of the company’s incubator is set to play a crucial role in attracting vital talent to London and will help to pave the way for the next generation of successful start-ups.”
The new jobs, which come 10 years after the company set up its first London office, will take Facebook’s total British workforce to more than 2,300 by the end of 2018, it said.
Facebook’s new office in the capital’s West End, designed by architect Frank Gehry, will house engineers, developers, marketing and sales teams working on products like Workplace, its business product which was built in London, it said.
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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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