Ernie Els of South Africa plays his second shot to the first hole during the final practice round of The Alfred Dunhill Links Championship at The Old Course in St. Andrews.
Ernie Els of South Africa plays his second shot to the first hole during the final practice round of The Alfred Dunhill Links Championship at The Old Course in St. Andrews.
Ernie Els of South Africa plays his second shot to the first hole during the final practice round of The Alfred Dunhill Links Championship at The Old Course in St. Andrews.
Ernie Els of South Africa plays his second shot to the first hole during the final practice round of The Alfred Dunhill Links Championship at The Old Course in St. Andrews.

Els backs tour increase


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Ernie Els has welcomed the decision to increase the minimum number of events required for membership of the European Tour from 11 to 12 and hinted that the current financial crisis could have an impact on the golfing calendar next year, particularly in the United States.

At least two of those tournaments have to be played in Europe - although one can be the Open Championship - with the changes coming after reports that world No 2 Phil Mickelson was among a number of US Tour-based players thinking of joining the European circuit. The Tour launches its new-look Race for Dubai in just over a month, culminating in the world's richest event in Dubai next November. That tournament, the Dubai World Championship, is open only to the leading 60 players on the Order of Merit, and as things stood, Mickelson and the others could have become eligible without setting foot in Europe.

Double Open champion Padraig Harrington, who has not played a continental event so far this season, was in favour of leaving the membership criteria unchanged. But Els, who has designed the course at Dubai Sports City that carries his name, said: "I've always supported both tours and I think to raise it to 12 is really not all that much to ask for players to do". The world No 8 added: "I think the European Tour is doing a wonderful job, especially in this financial crisis. Obviously with the US economy there's some big questions there, who knows what's going to happen with the tour there. I haven't heard anything specific but you don't have to be a rocket scientist to work out that some of the sponsors might be under a bit of stress. There's going to be some changes I think."

The South African's sentiments about the increase to 12 events were echoed by the English player Justin Rose, who said: "I still think it's something that should be easily attainable for somebody playing a worldwide schedule." * With agencies

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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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Dubai Creek Open in numbers
  • The Dubai Creek Open is the 10th tournament on this year's Mena Tour
  • It is the first of five events before the season-concluding Mena Tour Championship
  • This week's field comprises 120 players, 21 of which are amateurs
  • 15 previous Mena Tour winners are competing at Dubai Creek Golf and Yacht Club  
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