Saudi Arabia are reportedly pursuing Real Madrid and Brazil star Vinicius Jr with an offer of more than €1 billion.
Reuters and ESPN reported that the player is willing to hear the offer from the kingdom, which will be the biggest deal in the sport.
Vinicius, 24, has apparently been approached by the kingdom's Public Investment Fund about the possibility of moving to the Saudi Pro League on a five-year contract worth around €200m a season plus bonuses.
According to Reuters, the deal could include a separate 10-year contract to become an ambassador for the 2034 World Cup, which is set to be held in the country – the second time the global finals will be held in the Middle East.
While a formal offer has yet to be presented, Vinicius has reportedly given permission to PIF to approach Real Madrid.
According to the reports, while Vinicius is "happy and motivated" in Madrid, the lucrative offer must be looked at carefully.
However, Real Madrid manager Carlo Ancelotti said these are just rumours and added Vinicius is focused on performing for Real Madrid.
"The Saudi rumours do not affect Vinicius at all. He's a fantastic player who wants to help Real Madrid be at the top, as he did in the last few years," Ancelotti said ahead of the Uefa Super Cup final against Atalanta on Wednesday.
Saudi Arabia has been making major moves in the world of football with the aim of turning the SPL into a league that attracts the world's best players.
The process started with the PIF taking majority ownership of the country's four main clubs: Al Ahli, Al Ittihad, Al Hilal and Al Nassr.
The kingdom announced expansion plans this year. The kingdom's ministry of sport launched the latest phase of the "sports clubs investment and privatisation project" to bring in fresh investment at 14 more clubs.
Six clubs were made available for investments from August – Al Zulfi, Al Nahda, Al Okhdood, Al Ansar, Al Orouba, and Al Kholoud.
After that, eight more clubs – Al Shoalah, Hajar, Al Najmah, Al Riyadh, Al Rawdhah, Jeddah, Al Taraji, and Al Sahel – will be up for privatisation at a later stage.
The scale matches the ambition of the SPL, which has witnessed several significant transfer deals. Al Hilal spent €90m to buy star forward Neymar from Paris Saint-Germain.
That came alongside Karim Benzema moving to Al Ittihad after Cristiano Ronaldo signed a historic deal at Al Nassr.
Saudi Arabia also tried to persuade Kylian Mbappe to move to the SPL but the France captain turned down lucrative offer and joined Real Madrid in June.
The proposal for Vinicius is said to be similar to the one made to Mbappe. If he does agree, the Brazilian could link up with former Premier League players Riyad Mahrez and Roberto Firmino at Al Ahli.
Vinicius, who is under contract until 2027 after signing an extension in 2022, is a contender to win the Ballon d'Or award for the best player in the world after helping Real to a Champions League and La Liga double last season.
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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