Are you ready to convert?

I am not a fan of hybrids. Conceptually, I find them flawed, the idea of first having a battery supply power to an electric motor and then to later use the petrol engine to recharge the battery seems like a classic case of robbing Peter to pay Paul. Were it not for the energy recuperated in regenerative braking and coasting, they would have little fuel economy advantage over a car powered by a small petrol engine alone. It may come as a surprise to green acolytes, but all power to a hybrid's wheels - except that regenerated by the aforementioned braking and coasting - comes from burning gasoline; either from the internal combustion engine directly to the wheels or by that same motor recharging the battery.

My pragmatic objection is just the practical result of that very same limitation; when not driven in a specific manner (in the city, lots of coasting and gentle braking to recharge the battery), a hybrid's fuel economy advantage over a conventional counterpart is often dramatically less than official figures would indicate. On the highway, the advantage is especially narrow and often inferior to much simpler and less expensive diesel technology.

What does make sense, theoretically at least, is the concept of a plug-in hybrid. The energy gained by plugging into the electric grid doesn't have to be replenished by the petrol engine, so (in theory) there should a significant increase in fuel economy. It's hardly free energy, since the electricity has to be generated somehow, but it does save petrol and reduce tailpipe emissions. But how to put theory to test? Car makers are promising all manner of newfound technologies to reduce carbon emissions, but as of yet, there are no plug-in hybrids for sale. It all sounds good on paper, but how can we be sure that PHEVs (plug-in hybrid electric vehicles) will indeed fulfill their fuel-sipping promise?

Enter Pat Barnes with the solution. Barnes is the head of the service department at Scarborough Toyota, the largest Toyota dealership in Toronto, Canada. Toyota, of course, virtually invented the hybrid and has promised a plug-in version of its Prius in the next couple of years. Looking for a leg-up in the PHEV market, Barnes recently signed up to be the state of Ontario's sole distributor for A123 Systems's plug-in upgrade for older Priuses (A123 was a front runner to be the OEM supplier of batteries for Chevrolet's Volt). Recently I spent three weeks testing a converted 2005 Prius complete with a 110-volt outlet on its rear end (not to mention a lurid decal screen screaming its plug-in stature on its flank).

Conversion to plug-in status is remarkably easy with the Hymotion L5 lithium-ion nanophosphate battery fitted in the rear trunk and connected in parallel with the Prius's stock nickel metal hydride battery. Virtually all the connectors and paraphernalia are OEM equivalents and, unlike some lesser conversion kits, the five kilowatt-hour battery is cooled by an internal fan. The final bit of the modification is tricking the Toyota's computer to stay in EV mode longer. A switchable EV button is standard equipment on the Japanese and European Prius, so the modification requires the rejigging of a couple of wires to see a North American Toyota operate in electric-only mode at higher speeds.

The plug-in Prius's performance is nothing short of astonishing, the only downside being that the battery's boost only lasts about 40km. On the other hand, while in plug-in mode, the Prius's fuel-economy savings are dramatic and, perhaps more importantly for the future widespread adoption of plug-ins, easily replicated. Unlike the stock Prius, which only rewards those with a particularly sensitive and conservative right foot, the plug-in version improves fuel economy significantly even for lead-footed hedonists like Yours Truly.

For instance, in plug-in mode, I averaged 3.8L/100km in the city. That might not seem like much compared with the stock 2005 Prius's rating of 3.7L/100km, but it was a massive 36 per cent improvement over the 6L/100km my heavy-handed driving averaged when the extra battery ran out of juice (when it would operate as a normal Prius hybrid). On the motorway, I averaged about 4.0L/100km for the add-on battery's 40km range compared with the 6.3L/100km when the juice ran out and it was a normal hybrid again. I was most impressed with the plug-in's motorway economy advantage, since high-speed fuel consumption is the hybrid's traditional weakness.

Of course, had I played the ecoweenie, I could have done even better. Indeed, for a few short stints, I managed a magical 3.0L/100km consumption (and, for one very brief ride, even 2.8L/100km) but that was in ideal conditions. That said, it's immediately obvious that it's far easier to keep the converted Prius in its EV mode. Accelerating to 55kph on electric power only is now a doddle, even climbing slight upgrades. I often found the modified Prius motoring along silently, sans petrol motor, at 80kph and even 90kph. The extra juice the batteries are packing even contribute far more to high-speed propulsion, with the electric motor still providing consistent boost at 140kph, where the stock item is seldom working above 90.

Downsides to the Prius's metamorphosis are few. The biggest, of course, is cost. At CAN$10,400 (Dh37,000) installed, it's highly unlikely that the conversion will ever pay for itself despite the phenomenal fuel savings. As well, those taking infrequent, short hops in town will not see much fuel economy improvement, as the petrol engine fires up at every cold start and runs for the first few minutes to bring it up to temperature (note that Toyota's new, third-generation 2010 Prius partially addresses this issue). Constant, slow-moving traffic is the plug-in Prius's forte; shutting down and starting up its weakness. The only physical disadvantage to the conversion is that the new battery is rather large and occupies the space normally reserved for the spare tyre. Oh, and the A123 battery requires five hours for a full recharge.

I have often lamented the standard Prius's (and, indeed, all current hybrids') real-world fuel economy advantage. Despite the hype surrounding hybrid technology, I am constantly disappointed by their performance. However, if this test of a Toyota converted to plug-in capability is any indication of what the car makers will produce in the near future, then the future for PHEVs is indeed bright. Consider me converted. motoring@thenational.ae

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.”