Irena founder Hermann Scheer hailed for renewable energy role


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ABU DHABI // Widely regarded as the founder of Irena, Hermann Scheer's record in the field includes double-digit growth in Germany's renewable energy sector in less than a decade.

Scheer, a German parliamentarian and the president of the European Association for Renewable Energy, had long been a staunch advocate of renewable energy and was a key driving force in Irena's founding four years ago.

"Hermann is the father of Irena, he is an inspiring model," Hélène Pelosse, the organisation's interim director general, said in 2010 after his death.

"In his speech during the founding conference on Irena, Hermann reminded us that we shouldn't lose any more time to accelerate the transition towards renewable energies."

Scheer believed that the continuation of current patterns of energy supply and use was environmentally damaging, and that renewable energy was the only realistic alternative.

He saw the main obstacle to such a change as political, rather than technical or economic

During Abu Dhabi's bid to host the young agency, Scheer said that the candidacy of an oil-producing country to host the headquarters of the world's renewable energy agency had "a special meaning".

"More than 90 per cent of all countries are more or less newcomers." Abu Dhabi had taken decisive steps to assert itself as a future renewable energy centre, Scheer added.

He also highlighted Masdar City, the world's first large-scale carbon-neutral development, as another example of how the UAE was trying to establish itself as an influential player in renewable energy.

In 2002 Scheer was recognised by Time magazine as one of five "Heroes for the Green Century".

He wrote five books and more than 1,000 articles demonstrating the necessity and feasibility of a transition from fossil and nuclear resources to the field of renewable energy.

"The way is for renewables and we do not need a bridge," Scheer said in an interview with The National in 2009. "Nothing can be implemented faster than renewable energy."

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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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