Israel's Netanyahu criticised for installing $127,000 sleeping cabin on plane for five-hour flight


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JERUSALEM // Israeli Prime Minister Benjamin Netanyahu will seek alternate sleeping arrangements when travelling after receiving a sky-high bill for installing a customised bed on a recent flight to London, officials close to the Israeli leader said.

Mr Netanyahu found himself facing a public uproar today after Channel 10 TV reported over the weekend that he had spent $127,000 in public funds on a special sleeping cabin for the five-hour flight to attend former UK Prime Minister Margaret Thatcher's funeral last month.

Mr Netanyahu's office initially defended the decision, saying the prime minister had a busy schedule ahead of the flight and needed to be fresh for important meetings in Britain.

But following public criticism, officials close to Mr Netanyahu said late yesterday that he had been unaware of the cost, and once informed, he ordered the bed be cancelled on all future flights. The officials spoke on condition of anonymity because they were not authorised to talk to the media.

The uproar comes as Mr Netanyahu's government is in the process of drawing up a budget expected to include painful austerity measures and tax increases due to a widening deficit.

On Saturday night, several thousand people took to the streets in Tel Aviv and other cities to protest the expected budget cuts. Mr Netanyahu was meeting today with top officials to discuss likely cutbacks in the defence budget.

Micky Rosenthal of the opposition Labor Party called for an inquiry into the prime minister's "scandalous behavior" according to the Maariv daily on Sunday.

"We thought that nothing could surprise us anymore when it came to the Netanyahus' personal behavior. Well, we thought wrong," wrote Sima Kadmon, a political commentator in the Yediot Ahronot daily.

"It is unbelievable that not a single person in the prime minister's inner circle saw how reprehensible this was. Not a single person showed a tiny bit of common sense. There was no one who anticipated just how angry people would be when they learned about this," Kadmon said about the custom-made bed.

Earlier this year, Mr Netanyahu stopped buying ice cream from his favorite Jerusalem parlour after an Israeli newspaper discovered his office was spending $2,700 a year for the frozen treat.

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Started: established in 2016 and launched in July 2017
Based: Singapore, with offices in the UAE, Malaysia, Hong Kong, Thailand
Sector: FinTech, wealth management
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Investors: EightRoads Ventures, Square Peg Capital, Sequoia Capital India

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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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