Virgin Galactic completes final test flight before launching paying customers into space


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Virgin Galactic on Thursday completed what was expected to be its final test flight before taking paying customers on brief trips to space.

Six of the company's employees, including two pilots, landed at Spaceport America in southern New Mexico after the short up-and-down flight that included a few minutes of weightlessness.

It took about an hour for the mother ship to carry the spaceplane to an altitude where it could fire its rocket and make the final push to the edge of space.

“Successful boost, WE HAVE REACHED SPACE!” Virgin Galactic tweeted.

The flight came nearly two years after founder Sir Richard Branson beat fellow billionaire and Amazon founder Jeff Bezos and his rocket company Blue Origin into space.

Mr Bezos ended up flying nine days later from west Texas and Blue Origin has since launched several passenger trips. Federal aviation authorities banned Virgin Galactic launches after Sir Richard's flight to investigate a mishap.

Virgin Galactic has been working for more than a decade to send paying passengers on short space hops and in 2021 won the federal government's approval.

The initial commercial flight expected later this year will include members of the Italian Air Force who will conduct experiments.

Next will come customers who purchased tickets years ago for their chance at weightlessness aboard a winged spacecraft that launches from the belly of a plane.

About 800 tickets have been sold over the past decade, with the initial batch going for $200,000 each.

Tickets now cost $450,000 per person.

Virgin Galactic has reached space five times since 2018 and will be aiming for 400 flights per year from Spaceport America once it finishes building its next class of rocket-powered planes at a site in neighbouring Arizona.

After Sir Richard's trip, the Federal Aviation Administration grounded flights as it investigated a problem that caused the rocket ship to veer off course during its descent back to its runway in the New Mexico desert.

Virgin Galactic insisted at the time that no one was ever in any danger.

The company made changes to its carrier aircraft and the spaceplane. The delay was nearly twice as long as expected, partly due to supply chain issues and labour shortages.

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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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