Damaged and destroyed buildings in the town of Ihsim, in Syria’s Idlib region. AFP
Damaged and destroyed buildings in the town of Ihsim, in Syria’s Idlib region. AFP
Damaged and destroyed buildings in the town of Ihsim, in Syria’s Idlib region. AFP
Damaged and destroyed buildings in the town of Ihsim, in Syria’s Idlib region. AFP

There is reason to fear Turkish involvement in northern Syria


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Ever since the Syrian president Bashar Al Assad trapped the majority of the Syrian armed opposition groups in the final rebel-held enclave of Idlib, the world has feared a full-scale assault. With three million stranded there, the death toll would be colossal.

But following two months of air and ground assault from Syrian government forces and their Russian allies, the Assad regime is no closer to regaining the province. On average, more than a dozen regime fighters have died every day, while at least 629 civilians have been killed and 330,000 displaced since April, according to the Syrian Observatory for Human Rights. Idlib is under siege, but it has demonstrated the limits of Syrian and Russian airpower.

The faltering offensive could now draw Turkey into the fray. Ankara, which supports rebels in Idlib, signed a ceasefire with Moscow last year, which collapsed in April after violations on both sides. After repeated setbacks in its regional policies and particularly in Syria, Turkey is now keen to set the agenda. And while Ankara’s policy in Syria is complex – Turkey enjoys close ties with Russia and Iran, has sought the downfall of the Syrian president and sees the Kurds as its main threat – President Recep Tayyip Erdogan has yet to clarify what his overall strategy is in Syria. Ankara will host the leaders of Tehran and Moscow in August, in an effort to influence the next phase of the war.

There is reason to fear Turkey's plans. Having, controversially, taken delivery this week of the Russian S-400 missile defence system, which could attract fresh US sanctions, Ankara is flexing its muscles.

In recent days, the Turkish army has amassed troops and heavy weapons along the Syrian border. While any operation would likely target Syrian Kurdish forces – which Ankara regards as terrorists– the fighting could spill over into Idlib. The US military is keeping a close eye on its Turkish counterparts.

Once again, Idlib is at the centre of a tug of war. Although many extremists dwell there, so too do many millions of innocent Syrians. They urgently need an end to the violence but will not feel safe placing their lives in Mr Erdogan’s hands.

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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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