Dubai has launched a ports operator focusing on medium-sized developments in emerging markets.
The Dubai Ports, Customs and Free Zone Corporation (PCFC) on Wednesday launched P&O Ports, which has already signed initial agreements to start talks with the authorities in Madagascar, the Port of Berbera in Somaliland and Albania to enhance their port infrastructure, said the PCFC chairman Sultan bin Sulayem.
“The new company, specialised in developing and operating marine and inland ports in markets with a need for well-managed trade and logistics infrastructure, is designed to support sustainable development in emerging economies,” PCFC said in a statement.
“These brownfield ports, predominantly handling general cargo and bulk commodities, are a source of great opportunity, but tend to be uneconomic for larger operators. P&O Ports, as a newly created, specialised company, provides the flexibility to compete more efficiently within this sector.”
Mr bin Sulayem also serves as the chairman of Dubai’s flagship port operator DP World, the world’s fourth-largest that has more than 65 marine terminals across six continents.
“We have the drive and ambition to take our company and this prestigious brand to new heights, identifying the next wave of opportunities for the development and operation of mixed cargo ports worldwide, particularly in emerging economies,” he said.
“The launch of P&O Ports complements Dubai’s global investments in the port industry and diversifies its operations to include maritime terminals of all sizes.”
DP World reported an 11.7 per cent increase in net profit to US$675 million for 2014 as container volumes increased across its global ports network. It posted an 11 per cent increase in revenue to $3.4 billion last year.
The Middle East, Europe and Africa division – dominated by the company’s home port at Jebel Ali – produced the lion’s share of revenue as the UAE achieved a record year of throughput.
DP World handled 60 million twenty-foot equivalent units (TEU) across its global portfolio of container terminals in 2014, with gross container volumes increasing by 8.9 per cent on a reported basis.
New volume at UK’s London Gateway (UK) and Brazil’s Embraport (Brazil) contributed to the increase in reported volumes.
Capacity at DP World is forecast to rise to more than 80 million TEU this year from 70 million last year through expansions in Jebel Ali in Dubai, Turkey, Rotterdam and India. The firm plans to boost capacity to 100 million units by 2020, depending on market demand.
dalsaadi@thenational.ae
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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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