Signs of Iran deal progress are 'not positive', Saudi foreign minister says

Follow developments at the UN General Assembly as they happen.

Saudi Arabia's Foreign Minister Prince Faisal bin Farhan said on Friday there is little optimism for the fate of nuclear negotiations with Iran.

“We are hopeful that there is still potential for progress of the negotiations. But unfortunately, the signs, as of now, are not positive,” Prince Faisal said.

The Saudi diplomat spoke to media following a meeting of the Gulf Co-operation Council plus Jordan, Iraq and Egypt (GCC+3) in New York on the sidelines of this year's UN General Assembly.

The meeting came after talks around forging a new nuclear deal with Iran have floundered. Former president Donald Trump abrogated the US side of the agreement in 2018 and any new agreement to slow Iran's development of a nuclear weapon seems far off.

The GCC+3 meeting, hosted by US Secretary of State Antony Blinken, was “very good” and followed up on President Joe Biden's visit to Jeddah in July, Prince Faisal said.

Speaking on condition of anonymity, a senior diplomat at the meeting said the main issues discussed were Ukraine, food security, Palestine, Iran and Syria. The diplomat reiterated the Saudi foreign minister’s view on the nuclear talks with Iran, calling them “frozen”.

Representatives and foreign ministers from the UAE, Saudi Arabia, Qatar, Kuwait, Oman, Bahrain, Jordan, Iraq, Yemen and Egypt attended the meeting, which went 15 minutes over its scheduled time.

“The issues of regional co-operation and regional security, enhancing the partnership between the countries of the region and the United States” were discussed, Prince Faisal said.

China did not come up in the meeting, he added.

He said Riyadh is encouraging all parties to be serious about the Iran talks and “to find a way to resolve the issues while ensuring that the minimum necessary safeguards of non-proliferation are in place”.

Asked by The National if he had held any meetings with Iranian officials while in New York, the Saudi foreign minister said no such meetings have taken place.

Mr Blinken said at the start of the GCC+3 meeting that the discussion was to focus on “shared regional and global challenges, to bring an enduring peace to Yemen, dealing with the challenges posed by Iran, grappling with food insecurity, among many other issues”.

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.”