Dr Peter Douglas, the director of the University of Waterloo, UAE, says he remains optimistic about enrollment.
Dr Peter Douglas, the director of the University of Waterloo, UAE, says he remains optimistic about enrollment.

New university faces an old problem



DUBAI // Many foreign universities opening branches in the UAE have overestimated the size of their first-year enrolment. The nation's first Canadian university is no exception. The University of Waterloo started courses this week with about 25 students, far short of the 120 predicted by a university official earlier this year.

Still, Waterloo officials insist they are not disappointed. "Maybe we were overly optimistic," said the campus director, Dr Peter Douglas. "My understanding is that we have done better than many of the other universities in their start-up year." Even established institutions, such as the American University of Sharjah (AUS), began with modest numbers, he said. AUS, founded in 1997, now has about 5,000 students.

And the University of Waterloo itself was launched in Canada in 1957 with 74 students. It now has 28,000. The new branch, based at Dubai Men's College, offers bachelor of applied science degrees in chemical engineering and civil engineering. It is the first foreign university to open in partnership with a federal university. Waterloo aims to eventually admit about 65 students per course each year, said Dr Leo Rothenburg, associate vice president international.

"We've seen some figures from other universities, and it's pretty well the same trend with all of them," Dr Rothenburg said. "In the beginning, classes are small. There may be a positive aspect because it allows you to debug the system. It is easier to cope with small classes." Waterloo's high English-language entry requirements have been "a little bit of a stumbling block" to recruitment, Dr Rothenburg said. Other foreign universities have cited the same problem.

"There are a lot of very strong students from countries like Iran, but their English is a limiting factor," he said. Dr Rothenburg also said the high-profile closure of the George Mason University in Ras al Khaimah "absolutely" could dent people's confidence in branch campuses. George Mason closed this year following several years of poor student recruitment and after failing to agree on funding levels with the RAK Government. American University of Ras al Khaimah opened a new branch campus at the site this week.

The issue of branch campuses being at risk of closure was raised at an open house for potential students earlier this year, but Dr Rothenburg said it should not be a concern. "In the absolutely unlikely situation of it happening, we will take all the students to Waterloo immediately," he said. He said Waterloo's relationship with Dubai Men's College and the Higher Colleges of Technology should be a reassuring factor.

"I think the presence of the HCT proves considerable commitment to parents because it's a very strong local institution," he said. The partnership with a federal university means Waterloo is licensed by the Ministry of Higher Education and Scientific Research and programmes are accredited by the ministry's Commission for Academic Accreditation. Students will spend two years in the UAE before transferring to the home campus in the state of Ontario for their final two years.

Students who do not want to travel to Canada or are not granted visas can remain in the UAE to complete their course at the HCT, which will award them a degree. Those who complete two years in Canada will receive Waterloo and HCT degrees. dbardsley@thenational.ae

UAE currency: the story behind the money in your pockets

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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