A Christmas market in Oxford Street, London.
A Christmas market in Oxford Street, London.
A Christmas market in Oxford Street, London.
A Christmas market in Oxford Street, London.

Germany corners the Christmas market in Europe and beyond


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BERLIN // Wooden stalls selling hand-made nutcrackers, the sweet scent of mulled wine wafting through the cold air, soft lights glinting all around, revellers eating sausages to the gentle melody of Silent Night being played from a discreetly placed sound system.

No one does traditional Christmas quite like the Germans, and the world has been warming to Teutonic festive culture in recent years.

The country's Federal Statistics Office announced with a hint of pride this week that German gingerbread exports totalled 9,100 tonnes in the first nine months of 2011, far exceeding imports at 2,800 tonnes.

The nation that gave the world the Christmas tree - the custom was made popular in Britain in the mid-19th century by Queen Victoria's German husband, Prince Albert - is enjoying growing demand for seasonal Stollen cake from Dresden, now a common sight in supermarkets across Europe, and for the famous wooden ornaments made by small craft businesses in the Erzgebirge region of eastern Germany.

Carousels rotated by the heat of candles, and "Räuchermänner" (Smoking men) that billow out incense through their pipes used to be confined to German households at Christmas. Now they are adorning living rooms in many other countries, thanks in part to the spread of the German Christmas markets that have become a common sight in many parts of Europe.

The trend is especially evident in Britain, where the markets have sprouted in scores of towns in recent years. Birmingham has the biggest one outside Germany, with 200 stalls, staffed entirely by German traders and selling German food and products. It is expected to attract some 3.5 million visitors this season, the same as last year.

Kurt Stroscher, an official from the Frankfurt tourist office, pioneered the establishment of the markets in Britain by setting up the first one in Birmingham, which is twinned with Frankfurt, in 1997. It had just 11 stalls and was intended as a small, one-off gesture to show the city how the Germans celebrate Christmas. Mr Stroscher had no idea at the time how successful the venture would be. It proved so popular that it has been an annual tradition ever since.

"The aim is to bring a bit of German culture, some of our traditions to the United Kingdom," Mr Stroscher said. "I think it's proved popular because before we came, people had nowhere to meet and enjoy themselves outside in winter. We offer them an environment for doing so. Besides, we all live in a globalised world, and most people like to experience the customs of other countries."

Mr Stroscher now runs markets in Manchester, Leeds and Edinburgh as well, using the traditional Frankfurt Christmas market as a model. "We work very authentically in line with the German style, only soft light, and no funfair rides apart from traditional carousels," he said.

Private entrepreneurs have joined the trend and set up their own markets in other cities including London, which has several, including one in Hyde Park and one lining the south bank of the river Thames near the London Eye.

The predilection for Teutonic traditions may seem a little incongruous in a proud island nation like Britain, especially given mounting British suspicions of all things European in the euro crisis.

But visitors say the markets are a calming antidote to the hectic, brash commercialisation of the festival. For some Britons, Christmas is synonymous with alcohol-fuelled office parties and frantic shopping.

Christmas markets have also sprouted in the US, the largest one being in Chicago. China and Japan have theirs too. But Mr Stroscher, a purist, sees a geographical limit to the spread of German Christmas culture, at least when it comes to his own authentic brand of market.

"I see too many obstacles to setting up markets in China, the US etc," he said. "The problems of overseas transport, the different mentalities."

The people of Birmingham, for their part, have grown so fond of their "Frankfurt Christmas Market" that they have rejected attempts to infuse it with home-grown traditions. A few years ago, when the city council suggested giving the market some English flair by adopting a Charles Dickens theme, there was such a public outcry that the councillors quickly backed down.

Since then, everything has stayed reassuringly German.

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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.”