Russian forces may need to pause in coming weeks and Russian President Vladimir Putin has suffered an “epic fail” in Ukraine, the head of MI6 has said.
Although the war was “obviously not over”, the Russian invaders may be starting “to run out of steam” said Richard Moore, the chief of the UK Secret Intelligence Service, MI6.
“I think he has suffered a strategic failure in Ukraine. It is obviously not over," Mr Moore told the Aspen Security Forum in the US.
“He has obviously made, and the Russian forces have made, some incremental progress over recent weeks and months but it is tiny amounts.
“We are talking about a small number of miles of advance. When they take a town, there is nothing left. It is obliterated.
“And I think they are about to run out of steam. I think our assessment is that the Russians will increasingly find it difficult to supply manpower over the next few weeks.
“They will have to pause in some way and that will give Ukrainians opportunities to strike back. Their morale is still high. They are starting to receive increasing amounts of good weaponry.”
With winter coming and the pressure on gas supplies, “we are in for a tough time”, said Mr Moore, who believes a Ukrainian fightback could spread benefits across Europe.
“It is important, I think, to the Ukrainians themselves that they demonstrate their ability to strike back," he said. "I think that will be very important for their continuing high morale.
“I also think, to be honest, it will be an important reminder to the rest of Europe that this is a winnable campaign by the Ukrainians.”
Mr Moore said there was no evidence that Mr Putin was suffering from serious ill health and that going into the invasion “the reality of what they were about to encounter was just not being briefed up” to the Russian leader.
The invasion has prompted widespread sanctions against the Russian regime.
Mr Moore said the “pretty concerted effort” against Russia has led to the expulsion of “something roughly north of 400” intelligence officers who were operating under diplomatic cover.
“We reckon in the UK that has probably reduced their ability to do their business to spy for Russian in Europe by half,” he said.
Mr Moore thinks “it is too early to tell what lessons they [China] will draw from Putin’s misadventures in Ukraine” but China’s President “Xi Jinping is watching this like a hawk”.
This makes it “essential” that “we tough it out on Ukraine”, keep going through this winter and help the Ukrainians to win and negotiate from a position of significant strength, he said.
Russia and China are said to have a relationship that is based on the idea of “no limits”, the conference heard.
Despite being “quite conservative about military assistance”, the Chinese are helping the Russians with Ukraine by buying their oil, Mr Moore said.
“They are right on the front foot of beating the Russian drum and selling the Russian narrative around Ukraine, and doing it without any sense of irony …" he said.
“It feels pretty tight but it is not an equal partnership. Ukraine has made it less equal.
“Moscow is very much the junior and the Chinese are very much in the driver’s seat.”
The spy chief also voiced doubt that a landmark 2015 nuclear accord with Iran can be revived, saying Supreme Leader Ayatollah Ali Khamenei remained opposed despite marathon diplomacy with the United States.
"If we can get a deal it's probably the best means still available to constrain the Iranian nuclear program. I'm not convinced we're going to get there," said the MI6 chief.
"I don't think the supreme leader of Iran wants to cut a deal. The Iranians won't want to end the talks either so they could run on for a bit," Mr Moore said in a live interview in the US state of Colorado, in what was billed as his first public speaking appearance abroad.
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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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