Mercedes to 'think about' approach for Sebastian Vettel, contract talks with Lewis Hamilton on hold until F1 season starts


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Mercedes boss Toto Wolff has said the Formula One team could consider an approach for Sebastian Vettel as the German approaches the end of his time at Ferrari.

The driver market received an early shake up last month with the surprise news that Vettel would leave Ferrari, who snapped up Carlos Sainz as his replacement while Daniel Ricciardo agreed a deal to join McLaren from Renault.

The options open to Vettel now appear limited, but Wolff was adamant that Mercedes could be considered one of them.

“It’s not lip service,” said Wolff, who pointed to the abrupt retirement of Nico Rosberg in 2016 as the sort of thing that can alter plans overnight. “We owe it to a four-time world champion not to come out and say straightaway ‘no’. You need to think about it.

“On the other side we have a fantastic line-up and I am very happy with both our pilots and George [Russell, the Williams driver who is part of Mercedes’ programme].”

Speculation continues to surround the future of Mercedes' lead driver, the six-time and defending world champion Lewis Hamilton, who is yet to agree a new contract with the team.

With the delayed season due to begin in Austria in July, Wolff said he hoped to have an agreement in place "pretty soon" with Hamilton.

Hamilton, 35, is widely expected to agree fresh terms, but Wolff said no discussions have taken place during the sport’s enforced shutdown amid the coronavirus pandemic.

"We didn't see each other over lockdown, we were in different parts of the world but in regular contact," said Wolff, who has supported Hamilton's stance in calling out a lack of diversity within Formula One following the death of George Floyd in the United States.

“We didn’t work on any agreement between us but there is a lot of trust, we’ve been together for a long time and never in this time did we have to take the contract out and actually read what was written because it comes so naturally.

“Once racing resumes we will spend some time together, take the contract out of the cupboard, look at the timings, the numbers, the rights, and hopefully have something pretty soon.”

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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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