Al Assam: motorsport addicts cannot resist another fix of speed



The Emirati racing driver Saif al Assam said he believed Michael Schumacher's return to Formula One was sparked by his attempt to replace the injured Ferrari racer Felipe Massa earlier this year. "It's like a drug addict who gets himself clean and then finds himself in a situation again," al Assam said, referring to Schumacher's test drives in a 2007 Ferrari F1 car last season.

The drives were part of his aborted attempt to replace Massa, who was hurt during the Hungarian Grand Prix in July. The Brazilian driver was hit in the head by a 1kg steel spring that came off a car in front while he was travelling at 170mph. Al Assam said Schumacher had retired, in 2006, to recharge his batteries. But he added that by entering kart and motorbike races during that period, the German had shown he wanted to maintain an element of competition.

"[A racing driver] cannot help it. I suppose that is the case with Michael: your life moves on and you have family commitments, but you never stop thinking about it. It's something you never quite lose. Once you become a racer, you're always a racer." He said Schumacher would have missed the excitement of serious motor racing in retirement. Al Assam had once hoped to compete in Grands Prix himself. But a crash in England in 2003 during a Formula Three race put paid to his dream.

However, after six years away from the track, he is now competing again in the UAE GT Championship. He said the buzz of motorsport returned the moment he got back behind the wheel. "I was offered a run in a race car and everything came back. It was as if I had never stopped." Al Assam said he had suspected Schumacher was considering a full-time return to F1 as early as last November. "I saw him at the Formula One after-party [in Abu Dhabi] spending an increasing amount of time with Ross Brawn [the head of this season's championship-winning team BrawnGP]. It was just the two of them chatting. It looked like something was up."

And it so was: earlier this week Schumacher announced he was coming out of retirement. Karim al Azhari, an Abu Dhabi-born driver who is leading the UAE GT Championship, said Schumacher would have felt like it was a big part of his life that went missing when he retired. "[Racing] is something you're born with. People born with the need to race are very serious. It's something they have to do." Mohammed Ben Sulayem, the vice president of motor racing's governing body, the FIA, said Schumacher's return would be "good for the sport, the media and fans".

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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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