Berlin was literally a city of two halves during the Cold War. West of the Berlin Wall, fat cats cruised the streets in gleaming Mercedes; a symbol of sophistication and capitalist comfort. To the East, they drove the inimitable Trabant; a symbol of simplicity and communist frugality. This small, boxy, proletarian saloon was spartan, crude and humiliatingly underpowered; the antithesis of the reckless indulgence and cosseted comfort of western sedans. And yet, with waiting lists stretching to 15 years, it was one of the most sought-after cars in Europe. With a measly two-stroke power plant delivering a frankly pathetic 26hp, and with a positively pedestrian top speed of 112 kph, it wasn't designed for the fast lane. Like the communities they served, they lacked power, embodied uniformity and eschewed excess.
The Trabant was the prized possession of any self-respecting communist household and, between 1957 and 1991, more than 3,000,000 were produced and distributed throughout the Eastern Bloc. Although it proved robust and reliable, it was a car that required a lot from its driver. There were no electronic gizmos or driver aids in this redoubtable runaround. Indeed, to refuel, the bonnet had to be hitched up, petrol and oil added and then mixed by hand.
You may assume that such simplicity brought an environmental benefit, but Trabants were notorious for leaving billowing exhaust plumes in their wake, and they were nine times more polluting than their cultured counterparts in the west. Their maxim was "no frills, low bills". When the Wall came down in 1989, one of the most memorable and poignant scenes of that emotive time of history was the flood of liberated Trabants pouring into the West. At first, they were mocked by West Berliners, and the myth was born that they were made of cardboard, when in fact they used fibre-based Duroplast panels. They were so ubiquitous that they sold for a handful of Deutsche Marks as aspiring East Germans looked to indulge in the trappings of consumer culture.
As the millennium approached, the image of the Trabant changed. From simply utilitarian, it became über cool as it was adopted as the ultimate retro status symbol. It can now be seen in classic car parades, vintage rallies and even in custom-designed, supercharged form in the drag race strips of Eastern Europe. The Trabant is a car that evokes more sentiment and nostalgia than perhaps any other; a vehicle so synonymous with the history of a once-divided city that should be viewed as an artefact as much as a mode of transport.
tbrooks@thenational.ae
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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.”

