US missile system in Israel set for mid-December

A radar system, which the United States agreed in July to deploy in Israel to counter a perceived missile threat from Iran, is to go operational in mid-December, army radio reported today. The US military technicians who will operate the system are currently carrying out the final tests, the radio said. The radar system, which has a range of more than 2,000 kilometres, has been installed in the Negev desert in southern Israel.

Some 120 US troops have been deployed to Israel to set up and operate the system, public radio reported in late September. The US defence secretary Robert Gates agreed to the deployment after the Israeli defence minister Ehud Barak and army chief Lieutenant General Gabi Ashkenazi made separate visits to Washington in July to discuss the perceived Iranian threat. It was formally announced by the Pentagon early last month.

Iran boasts a number of ballistic missiles with the range to hit targets in the Jewish state and both Israel and its US ally suspect Iran of seeking to develop a nuclear warhead under cover of its civilian nuclear programme. The two governments' concerns are expected to top the agenda of the outgoing Israeli prime minister Ehud Olmert's White House talks with the US president George W Bush on Monday.

"The idea here is to help Israel create a layered missile defence capability to protect it from all sorts of threats in the region, near and far," a senior Pentagon official told AFP in late July. The so-called X-band radar system, also known as an AN/TPY2, is a powerful phased array radar that is designed to track ballistic missiles through space and provide ground-based missiles with the targeting data needed to intercept them.

The United States deployed a similar system to Japan in 2006 in response to a North Korean missile test. It plans to install a larger one in the Czech Republic. The Pentagon was scheduled to deploy the radar to Israel in the autumn of 2009 for a joint exercise but moved it up a year following the talks in Washington earlier this year. The system includes two massive radar antennae which have been under construction near the Dimona nuclear plant in the Negev.

The Maariv newspaper reported on Oct 5 that the two 400-metre-high masts being erected near the top-secret military plant where Israel is widely believed to have developed the only nuclear arsenal in the Middle East would be the largest in the region. Data from the radar will be provided to Israel's missile defence system, but it will remain owned and operated by the US military. Since the US-led overthrow of Saddam Hussein in 2003, Israel has regarded Iran as its main strategic threat.

* AFP

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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.”