Hijacked UAE oil tanker freed by Somali pirates

DUBAI // A small oil tanker owned by a Sharjah firm has been released by Somali pirates without a ransom payment, after the Somali cargo owners pressed local tribal leaders and government officials to intervene.

The MV Jubba XX and its 16-man crew were seized on July 16 while carrying 3,500 tonnes of oil worth Dh17m to Berbera, Somalia.

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“The cargo owners put the matter in front of the tribes. I don’t know who they contacted and how,” said Omar Alkheir, whose Umm al Quwain-based Emirates Shipping Company manages the vessel.

He received the news from the ship owner, Jubba General Trading, on Wednesday and was able to contact the crew soon afterward.

Pirate ransoms average Dh18 million and take about seven months to negotiate, a Nato representative said earlier this year.

Mr Alkheir said the cargo owners, Red Sea Company, had first planned to reclaim the ship by force. The nine captors on board caught wind of this and increased their number to 40, the crew told him. They changed locations several times.

After two days Mr Alkheir said he convinced the cargo owners not to resort to violence, pointing out that the oil was flammable.

“I told him, don’t do that, because one bullet and it will make fire. And no one will come out with anything,” he said.

With so many pirates on board, food supplies ran low. The captors beat the four Somali sailors on board after accusing them of trying to call for help. They robbed the sailors of their mobile phones, watches, cash, and other possessions.

The crew are now bringing the MV Jubba XX to Bossaso, Somalia, to resupply, then to Berbera to unload the cargo.

"They are happy," Mr Alkheir said. "They don't believe it."

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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.”