Assad and Sarkozy meet to defuse Hariri situation


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DAMASCUS //Bashar al Assad, the Syrian president, held talks with his French counterpart, Nicolas Sarkozy, in Paris yesterday, as part of a continuing diplomatic effort to overcome a crisis in Lebanon.

"No one wants there to be clashes, fitna (strife within the Muslim community), between Lebanese," Mr Assad said after a luncheon with the French president that appeared to suggest Mr Sarkozy's government has stepped up its role to prevent any outbreak of violence in Lebanon. The country is, once again, facing the prospect of civil strife with members of Hizbollah expected soon to be formally indicted for alleged involvement in the assassination of the former Lebanese prime minister, Rafiq Hariri.

When asked about the prospects of a Syrian-Saudi political initiative in Lebanon, something the two regional powers have been working towards, Mr Assad said that "the solution can only be Lebanese, it can be neither Syrian, nor Saudi, nor French. We (Syrians) don't want to intervene, we don't want to interfere in an internal Lebanese situation".

Syria and Saudi Arabia, influential regional supporters of rival Lebanese factions, have been co-operating ahead of the possible indictments. However, with the Saudi monarch, King Abdullah, sidelined by illness, France appears to have stepped in to help. Paris, like Riyadh, enjoys close relations with pro-western Lebanese factions led by the premier, Sa'ad Hariri, son of Rafik, while Syria is affiliated with their opponents, the Iranian-backed Hizbollah.

Mr Assad's visit to Paris, a week after Mr Hariri made a similar trip, comes as the various groups look for a solution that will prevent another Lebanese meltdown.

Hizbollah, the Islamic militant movement, has taken a hard-line stance against the UN tribunal investigating the 2005 assassination of Hariri. Denying any involvement, it has warned it will forcibly prevent the arrest of any of its members.

The indictments crisis has already seen Hizbollah suspend involvement in Lebanon's fragile power-sharing coalition government, which was patched together with Syrian, Saudi and French help after a time of similar crisis in 2008.

Mr Hariri, who played a major role in the creation of the UN tribunal whose work has been a slow-burning fuse beneath Lebanon's explosive political mix, has thus far vowed to stand by its investigation into his father's death, once again putting his supporters on a collision course with the heavily armed Hizbollah.

But, as in 2008, when the so-called Doha accords headed off a showdown between the factions, key regional and international players, including Syria and France, again seem intent on avoiding trouble.

"The Lebanese factions cannot sort out this matter themselves so Syria and France need to help them make the big decisions," said a Damascus-based Syrian commentator, on condition of anonymity. "Assad and Sarkozy have the same target, they agree that stability and security in Lebanon are a priority."

The UN tribunal was expected to issue draft indictments as early as this week, although their contents would not be made public until approved by a pre-trial judge. That process will take two months, giving added breathing space to diplomatic efforts. Syria, like Hizbollah, has been highly critical of the UN tribunal, dismissing it as biased and motivated by their enemies. Damascus was once accused of orchestrating the Hariri murder - something it has always denied - before the spotlight fell on Hizbollah.

France was the colonial power that carved Lebanon out of the Levant in 1920, and Paris has since sought to retain influence over the country. Syria, which neighbours Lebanon, has long viewed it as falling under Damascus's sphere of influence and as central to its own security, given the decades-long Arab-Israeli war.

* With additional reporting from Agence France-Presse

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Union Berlin v Hertha Berlin (8pm)

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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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Founded: 2015

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Sector: F&B

Funding so far: Dh3 million

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Future markets: Saudi Arabia, potentially Kuwait and other GCC countries

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