The Italian consulate in Cairo after a car bomb killed one and injuried several civilians. Amr Nabil / AP Photo
The Italian consulate in Cairo after a car bomb killed one and injuried several civilians. Amr Nabil / AP Photo
The Italian consulate in Cairo after a car bomb killed one and injuried several civilians. Amr Nabil / AP Photo
The Italian consulate in Cairo after a car bomb killed one and injuried several civilians. Amr Nabil / AP Photo

Reading the entrails of the Cairo blast


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The attack on the Italian consulate in Cairo was claimed by a local branch of ISIL in the usual way – a tweet gave details about the booby-trapped vehicle that exploded at 6.30am on Saturday, killing one, injuring nine and blowing out the facade of the charming building that has stood at one of Cairo’s busiest intersections for a hundred years. Both the attack and the subsequent claim of responsibility speak volumes about ISIL. By targeting a western diplomatic mission, it is obvious that the militants want to, literally, run foreigners out of town, frightening away everyone who comes to the Egyptian capital for business – or pleasure. The two attacks in Tunisia were also designed to mortally wound that country’s economy, government, international security standing and self-confidence in the fight against extremism. It’s obvious that the same sort of brutal agenda has been planned for Egypt.

But an interesting question arises from the Cairo consulate attack, which represents a bit of a departure for ISIL, or more accurately, the local entity that claimed responsibility for the blast and which claims allegiance to the so-called caliphate. Is ISIL now veering towards acts of outright terrorism? Until now, it has seemed to fancy itself more like a conventional army, albeit one prone to guerrilla warfare. Until now, it has strived mightily to portray itself as a disciplined force that is taking territory, boldly unpicking cartographical borders drawn by European bureaucrats and giving Muslims everywhere a glorious sense of fighting to reverse western injustices. But then comes the bomb-laden car in Cairo, which seems to suggest a move towards terrorism outside of Iraq.

Why? There could be any number of reasons but two seem especially worthy of note. The curse of popularity and the demon of success. ISIL’s growing popularity as a brand has meant groups in disparate parts of the world have pledged allegiance. Having signed up, it stands to reason that all these new ISIL fighters must be chafing at the bit for something to do. Could the recent attacks be the result?

And then there is ISIL’s success on the battlefield in the past year. With every territorial gain, the bar was set higher but military momentum is more difficult to sustain than cowardly terrorist attacks on soft targets. Terrorist acts are not as faux heroic as fighting for ISIL’s twisted version of faith but the group has not disowned them – or indeed, its local franchisees.

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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