F1 is an industry with rewards

I'm all for investment in motorsport infrastructure and Formula One. Together, they act as catalysts for rapid progress and they generate local interest - all of which is good for those of us who want to see a vibrant national racing scene develop in UAE. They also mark the stamp of approval on the sport by the government, and this is crucial if we are to see talented Emirati drivers properly supported in their journey to international stardom.

But still, I think we may be missing a trick. While investment in F1 has already paid off by helping put Abu Dhabi firmly on the global map, I would argue that there is perhaps a bigger prize for the UAE: jobs. Exposure to F1, the pinnacle of high-performance engineering, stimulates enormous interest in those young people with strong technical potential. The F1 in Schools programme is proof of that.

And in the UK, you can go on to study for a national diploma or an honours or master's degree in one of many disciplines surrounding motorsport. Indeed, GulfSport's staff in the UAE includes two motorsport graduates and we regularly provide work experience to undergraduates in their gap year. In the UK, hundreds of newly qualified young people find rewarding careers every year in a niche market that is considered by many to be the crown jewel of its manufacturing sector. According to the Motorsport Industry Association (MIA), the industry supports 4,500 small businesses employing 38,500 people who collectively generate annual revenues equivalent to Dh35 billion. This is clearly an important economic asset.

Not surprising, then, that the UK's House of Commons Business, Innovation and Skills Committee is worried that the country's motorsport industry may lose its current pole position because ministers are not giving it enough support. The MIA believes that other countries envy the success of Britain's industry cluster and have active government programmes to try and capture a share. They are concerned that such countries, often spearheaded by hosting an F1 race, will pose a real threat to their leading position.

This is the trick I believe we may be missing. We have a growing population of ambitious young nationals looking for interesting and rewarding careers in the private sector. If we offer them a similar level of specialised higher education in motorsport and automotive engineering here, I believe we would see the beginnings of a new industry as some of the leading motorsport players perhaps move to the UAE for the availability of qualified people and infrastructure.

This is already happening close to home. Williams F1 has established a technology centre in Qatar for research into the industrial application of KERS-inspired technology and to further its simulator knowhow for race- and road-car use. Formula Gulf 1000 is a series that will act as an incubator for local racing talent. We should also work hard to put the UAE in a position whereby it also produces mechanics, engineers and marketers who can support their compatriots and cement the UAE's position on the global motorsport map.

Barry Hope is a director of GulfSport Racing, which is seeking the first Arab F1 driver through the FG1000 race series.

Join the UAE racing community online at www.singleseaterblog.com

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Tips on buying property during a pandemic

Islay Robinson, group chief executive of mortgage broker Enness Global, offers his advice on buying property in today's market.

While many have been quick to call a market collapse, this simply isn’t what we’re seeing on the ground. Many pockets of the global property market, including London and the UAE, continue to be compelling locations to invest in real estate.

While an air of uncertainty remains, the outlook is far better than anyone could have predicted. However, it is still important to consider the wider threat posed by Covid-19 when buying bricks and mortar.

Anything with outside space, gardens and private entrances is a must and these property features will see your investment keep its value should the pandemic drag on. In contrast, flats and particularly high-rise developments are falling in popularity and investors should avoid them at all costs.

Attractive investment property can be hard to find amid strong demand and heightened buyer activity. When you do find one, be prepared to move hard and fast to secure it. If you have your finances in order, this shouldn’t be an issue.

Lenders continue to lend and rates remain at an all-time low, so utilise this. There is no point in tying up cash when you can keep this liquidity to maximise other opportunities.

Keep your head and, as always when investing, take the long-term view. External factors such as coronavirus or Brexit will present challenges in the short-term, but the long-term outlook remains strong.

Finally, keep an eye on your currency. Whenever currency fluctuations favour foreign buyers, you can bet that demand will increase, as they act to secure what is essentially a discounted property.

GIANT REVIEW

Starring: Amir El-Masry, Pierce Brosnan

Director: Athale

Rating: 4/5

Results:

6.30pm: Maiden Dh165,000 2,000m - Winner: Powderhouse, Sam Hitchcott (jockey), Doug Watson (trainer)

7.05pm: Handicap Dh165,000 2,200m - Winner: Heraldic, Richard Mullen, Satish Seemar

7.40pm: Conditions Dh240,000 1,600m - Winner: Walking Thunder, Connor Beasley, Ahmed bin Harmash

8.15pm: Handicap Dh190,000 2,000m - Winner: Key Bid, Fernando Jara, Ali Rashid Al Raihe

8.50pm: The Garhoud Sprint Listed Dh265,000 1,200m - Winner: Drafted, Sam Hitchcott, Doug Watson

9.25pm: Handicap Dh170,000 1,600m - Winner: Cachao, Tadhg O’Shea, Satish Seemar

10pm: Handicap Dh190,000 1,400m - Winner: Rodaini, Connor Beasley, Ahmed bin Harmash

UAE currency: the story behind the money in your pockets

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.”