La Liga leaders Barcelona have the chance to move nine points clear of Real Madrid this weekend when they take on city rivals Espanyol in the Catalan derby.
Hansi Flick's side enter the derby with confidence sky high after thrashing Real Madrid 4-0 last week to open up a six-point lead over their arch rivals.
Madrid's game at Valencia has been postponed after deadly flooding in the region, along with nearby Villarreal's game against Rayo Vallecano.
The derby offers Barcelona a chance to flex their muscles in front of their home fans after romping past the champions at the Santiago Bernabeu last weekend.
Barca thrashed Bayern Munich 4-1 in the Uefa Champions League before that and Flick, who arrived this summer to replace Xavi at the helm, said the key to his team's form is the good atmosphere at the club.
Clasico player ratings
"When I started with my team, and all the experts, and [sporting director] Deco and the president [Joan Laporta], we said we have to build an atmosphere where the players can show their best performance," explained the coach after thrashing Madrid.
"The atmosphere is really good and the mentality in the team is really outstanding."
Barcelona have won 10 matches in La Liga and lost just once in their first 11 games, as well as inflicting Madrid's first defeat in the Spanish top flight in over a year.
Flick's players are thriving under the German, with veteran striker Robert Lewandowski in sensational form up front, flanked by teenage star Lamine Yamal and Raphinha in the form of his career.
Only two teams have conceded more than Espanyol in La Liga and their visit to the Olympic stadium offers Barcelona a chance to keep adding to their table-topping tally of 37 goals scored.
Lewandowski, 36, struck twice in the Clasico and has 14 league goals. The forward looks back to his best after struggling to make an impact last season.
Flick operates with a high defensive line which appears risky at times but helped them defeat both Bayern and Spanish and European champions Madrid.
"We keep going with our idea, we have a flow at the moment and we have to keep going," said Flick.
"[The strategy] looks dangerous, but it's not dangerous."
Espanyol, 17th, usually relish the chance to cause trouble for their city rivals but Barcelona's ruthless form makes this derby an especially daunting challenge.
Former Espanyol president Joan Collet, who led the club between 2012 and 2016, was especially pessimistic.
"Unfortunately I see very little chance of winning, I will not think about or watch the match," he told Radio Despi.
"I will disappear off the map, I will turn off my phone and when it's over I will see what happened.
"It's not that I have no hope, it's that they've taken all my hope away."
Elsewhere Atletico Madrid, fourth, will look to arrest their recent slump at home against lowly Las Palmas, who are 18th.
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Retirement funds heavily invested in equities at a risky time
Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, just at a time when trade tensions threaten to derail markets.
Retirement money managers in 14 geographies now allocate 40 per cent of their assets to equities, an 8 percentage-point climb over the past five years, according to a Mercer survey released last week that canvassed government, corporate and mandatory pension funds with almost $5 trillion in assets under management. That compares with about 25 per cent for pension funds in Europe.
The escalating trade spat between the US and China has heightened fears that stocks are ripe for a downturn. With tensions mounting and outcomes driven more by politics than economics, the S&P 500 Index will be on course for a “full-scale bear market” without Federal Reserve interest-rate cuts, Citigroup’s global macro strategy team said earlier this week.
The increased allocation to equities by growth-market pension funds has come at the expense of fixed-income investments, which declined 11 percentage points over the five years, according to the survey.
Hong Kong funds have the highest exposure to equities at 66 per cent, although that’s been relatively stable over the period. Japan’s equity allocation jumped 13 percentage points while South Korea’s increased 8 percentage points.
The money managers are also directing a higher portion of their funds to assets outside of their home countries. On average, foreign stocks now account for 49 per cent of respondents’ equity investments, 4 percentage points higher than five years ago, while foreign fixed-income exposure climbed 7 percentage points to 23 per cent. Funds in Japan, South Korea, Malaysia and Taiwan are among those seeking greater diversification in stocks and fixed income.
• Bloomberg
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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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