As one of the new breed of corporate technocrats that has emerged from the Dubai financial crisis, Sheikh Maktoum bin Hasher Al Maktoum knows he has to concentrate on delivery.
"The worst is behind us, but there are still big challenges ahead. It all depends on the outcome," he says, in a rare media interview.
He was talking about Dubai, now embarking on a new plan for growth after the scare of the 2009 financial crisis. But he could just as easily have been talking about Shuaa, the region's oldest investment bank, of which he is the executive chairman.
He was parachuted into the Shuaa job some 18 months ago, after three years of losses had marred its reputation as one of the most prestigious financial institutions in the Arabian Gulf.
After a period of intense introspection at the 33-year-old bank, and some swingeing job cuts, in early October Sheikh Maktoum stood in front of an audience of Dubai's elite at the grand Godolphin Ballroom to proclaim the new strategy, and the way forward, for Shuaa.
Dubai Holding, a key stakeholder and owner of 48 per cent of Shuaa's shares, was represented among the audience. "At the presentation, I was conscious of the fact that a good plan can go wrong when only insiders understand it," he says. "A friend of mine said it was the worst speech he'd ever heard me deliver, but the people there were among the smartest in the world, and I think I got the point across."
The plan was a change of direction for Shuaa. From being an orthodox one-stop-shop investment bank, it will in future focus more on being a provider of credit, especially to small and medium enterprises.
"The mandate when I came in was to be profitable in 2012, and we could have done that if we'd sold the credit side, but we identified that as a core, profitable business and decided to grow it," says Sheikh Maktoum.
"Now we are pledged to make a profit by 2013. The range forecast is from a loss of Dh18 million [US$4.9m] to a profit of Dh6m, but we have to make a profit," he emphasises.
Sheikh Maktoum is not a banker by training or background, but the Shuaa job was recognition for his talents and as a "fixer".
His MBA in the United States was in restructuring, "so I gravitated naturally towards fixing things."
The first couple of ventures back in the UAE were rather more entrepreneurial. He helped to bring the Virgin Megastores brand into the country, then set up AI Grand Prix motor racing, subsequently sold for a multimillion dollar profit.
After some personal and profitable property dealing in the run-up to the global financial crisis, he says, "I took a bit of a sabbatical, and liquidated all my assets in July 2007."
Smart timing, but the extent of the crash of the following year was a shock. "As markets crashed I kept buying the Dow Jones index, at 10,000, then at 8,000. When it hit 6,000 I turned off the TV," he recalls.
He won his first job as a turnround specialist when he was asked to sort out the Al Fajer property business, which had fallen victim to the boom-and-bust in Dubai. Delayed properties were completed and delivered.
A different kind of challenge came with Al Nasr football club, whch had fallen on hard times.
"It was tough work … And football fans will tell you straight if you've got something wrong, in the stadium or the TV match analysis, " he says. He got the club into the top three of the UAE league.
Bringing Shuaa back to the big time is a different game. "Shuaa is coming back, we know the worst is behind us. Every quarter, no, every day is better than the last," he says.
"In our strategy, we haven't factored in any market upturn, so it's a robust plan."
fkane@thenational.ae
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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2006: Didier Drogba (Chelsea and Ivory Coast)
2007: Frederic Kanoute (Sevilla and Mali)
2008: Emmanuel Adebayor (Arsenal and Togo)
2009: Didier Drogba (Chelsea and Ivory Coast)
2010: Samuel Eto’o (Inter Milan and Cameroon)
2011: Yaya Toure (Manchester City and Ivory Coast)
2012: Yaya Toure (Manchester City and Ivory Coast)
2013: Yaya Toure (Manchester City and Ivory Coast)
2014: Yaya Toure (Manchester City and Ivory Coast)
2015: Pierre-Emerick Aubameyang (Borussia Dortmund and Gabon)
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Price, base: Dh105,900 (Premium); Dh115,900 (Sport)
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Transmission: Continuously variable transmission
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Founder: John Tsioris and Ioanna Angelidaki
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Staff: 200
Funding: Undisclosed, but investors include the Jabbar Internet Group and Venture Friends
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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.”