Barbed comment: A Palestinian flag is attached to the barbed wire of Israel's Ofer prison in the West Bank, while the families wait for the release of Palestinian prisoners outside the prison yesterday. Abbas Momani / AFP Photo
Barbed comment: A Palestinian flag is attached to the barbed wire of Israel's Ofer prison in the West Bank, while the families wait for the release of Palestinian prisoners outside the prison yesterday. Abbas Momani / AFP Photo
Barbed comment: A Palestinian flag is attached to the barbed wire of Israel's Ofer prison in the West Bank, while the families wait for the release of Palestinian prisoners outside the prison yesterday. Abbas Momani / AFP Photo
Barbed comment: A Palestinian flag is attached to the barbed wire of Israel's Ofer prison in the West Bank, while the families wait for the release of Palestinian prisoners outside the prison yesterda

Israel readies for second prisoner swap


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TEL AVIV // Israel was to release 550 Palestinian prisoners last night in the second part of a prisoner swap with Hamas that in October brought home a 25-year-old Israeli soldier held captive for five years.

The Egyptian-brokered agreement between Israel and the Islamic group that rules the Gaza Strip required Israel to free 1,027 Palestinian prisoners. In exchange, Hamas freed Gilad Shalit, an Israeli sergeant held in Gaza since he was taken hostage in June 2006 near the Gaza-Israel border.

The deal marked a rare direct arrangement between Israel and a group it views as a terrorist organisation after five years of stop-start negotiations.

The talks have stumbled in the past over how many Palestinians convicted of killing Israelis would be released and whether they would be allowed to return home to the West Bank or Gaza.

While many of the group freed in October had been serving life sentences for deadly attacks, none of those due for release had been convicted of killings.

Most of the prisoners due for release, including six women and about 50 teenagers, were part of the secular Fatah movement that rules the Israeli-occupied West Bank and rivals Hamas.

Forty-one prisoners were to be taken to Gaza and another two were to be driven to Jordan.

The Gaza official, Riyad Al Ashqar, was quoted in Palestinian news reports yesterday saying the longest-serving prisoner released had been in an Israeli jail for 18 years; about 220 of were detained in the past two years and the rest had been jailed for several years.

The second part of the pact allowed Israel to choose which prisoners will be released, so many of those freed had been serving light sentences or were nearing the end of their terms.

The release of convicted killers in the first phase triggered fierce opposition from many on the Israeli right, who claimed the prisoners would resume violence.

Last week, relatives of Israelis killed by Palestinians also attempted to block the second part of the deal going ahead. But Israel's supreme court rejected their appeal.

The Palestinian prisoners had been welcomed home as heroes by their communities, receiving grants of up to US$10,000 (Dh36,730) from the Palestinian Authority in the West Bank and the Hamas government in Gaza to help restart their lives.

Many of those released have quickly tried to make up for lost time by getting married, entering academic programmes or building homes.

While the Palestinians rejoiced at the freeing of hundreds of prisoners, some have criticised the release as an empty gesture because Israel has in the past tended to rearrest on similar charges many of the individuals it had freed. Addameer, a Palestinian prisoners' advocacy group, said 470 Palestinians were arrested since October, including 70 teenagers and 11 women.

The group also said the Israeli army has frequently raided the homes of the Palestinians released in the first stage of the deal, summoned them to meet Israeli security officials and has rearrested one of those freed.

Israel's prison service says more than 4,770 Palestinians are still in the country's jails. Of those, about 550 are serving life terms. The deal was viewed as a political boost both for Hamas and for Benjamin Netanyahu, the Israeli prime minister.

Analysts said the release of Palestinian prisoners is likely to have politically bolstered Hamas ahead of possible elections next year. Fatah and Hamas clinched a unity agreement six months ago and Mahmoud Abbas, the Fatah head and president of the Palestinian Authority, has said the ballot may take place in May.

Mr Netanyahu also profited from the pact, gaining support at home after months in which he had faced rallies over the high cost of living.

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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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