TThe elite of Middle East racing drivers take to Yas Marina Circuit today to show off their skills, and Richard Cregan, the track's chief executive, believes the meeting is as important as a Formula One race.
The Abu Dhabi Grand Prix has been on the F1 calendar since 2009 and has drawn attention to motorsport in the UAE and the surrounding region.
But while getting the chance to see Sebastian Vettel, Lewis Hamilton and Fernando Alonso battling in the flesh for victory has proven successful, with two sellout races as prove to the popularity of the F1 race, Cregan believes the only way for the UAE to really develop its own motorsport identity is to have local drivers on track.
The Local Champions event at Yas Marina today will see the Porsche GT3 Cup Challenge and the Radical Masters in action, and the field will be made up of drivers from the UAE and the GCC.
Cregan said it was vital to find talented local racers, providing inspiration for the next generation of Emirati drivers.
"I think the most important thing with creating any kind of sustainable motorsport is looking for local champions," he said.
"If you look at all the big events that we have they certainly have an international appeal, they have a far greater reach than even the GCC area, which is why we have them.
"But if you want to build sustainability into the business we're in then you have to get the local champions.
"That is to me why this weekend as is equally important as a F1 weekend, if that makes sense."
Khaled al Qubaisi is arguably the most high-profile Emirati racing today.
He is in the hunt for the Porsche GT3 crown, currently sitting third in the championship. Twelve points cover him, first-placed Sheikh Salman bin Rashid al Khalifa, of Bahrain, and second-placed Prince Abdulaziz al Faisal, from Saudi Arabia.
Al Qubaisi set the pace in the first recorded test session yesterday with the best lap time.
Al Qubaisi has also gained experience racing in Europe in the Porsche Supercup, and Cregan hopes that youngsters will want to follow in their Emirati compatriot's footsteps.
Said Cregan: "The ultimate goal for me, personally, is that the people who are racing now, like Khaled al Qubaisi for example, they will become the mentors for the kids going in, and they will able to help us help them find sponsors and support.
"What we are trying to do now is trying to build recognition for the sport. The next thing is recognising the local drivers that are in those sports and then using those as ambassadors to build the sport for the future and get young people in there.
Cregan hopes events like today's will give opportunities to Emirati and other GCC drivers to show what they can do, and that they have what it takes to make it in motorsport.
"I think there is a great level of talent coming through," he said. "What we need to be doing is giving them a platform where they can go out and show that.
"We have to grow it, we have to get to the opportunity where we are putting Emiratis into race cars. I think the Formula Gulf Cup 1000 is going to be great in offering a platform where kids can go from karting into single-seater cars.
"Then you have the Radicals, which are here this weekend, you have the Porsche Middle East Cup, and they are areas which people can go into at a club level and compete in."
Cregan has been anxious to get more Emiratis competing in motorsport. He said that one of the biggest developments in the last year at Yas Marina was the opening of their outdoor karting track, which now allows youngsters to get a taste of driving while watching racing at the track during events.
"I think that is a big step," he said.
"We had to have a karting track, whatever category it was. There obviously is the karting track at Al Ain Raceway, which is one of the best tracks out there, and it has the finals of the Rotax Max Challenge this year, which is great.
"But it was very important for us to have a track here at Yas Marina as it is the first rung, and adults and kids alike get a taste of what competition is about.
"You watch people come out here and get in the kart and they want to enjoy it, but as soon as they get in the kart they want to compete.
"They may say beforehand that they want to enjoy it, but as soon as they sit in you can see them think 'I'm going to beat my mate.'
"That is the great thing about it and you can do it in a safe environment.
"It has been a great success and we're very pleased with 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.”
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