Rohit Walia is chief executive and executive vice chairman of Alpen Capital Group and Bank Sarasin-Alpen Group, which helps manage more than 103 billion Swiss Francs (Dh445.12bn) in assets under the Swiss-based Sarasin Group. He recently spoke from his Dubai office about managing the bank's business in the Middle East and India.
You had more than 20 years of banking experience when you opened this office in 2005. How did you try entering the market differently from competitors?
I think because of the fact that I'm a corporate banker, and not really a private banker, I pushed down the bank's throat I should be allowed to have corporate advisory banking in the Middle East. Typically, when a rich entrepreneur comes [to the bank], if all I'm going to discuss with you is products, the meeting will not go more than 20 minutes. But if I talk to you about selling your business [or] raising cash for you, you as an entrepreneur are getting more seriously involved with me.
How are you different from your competition?
I talk to clients all the time. I've never gone out and shown my own product first. I ask them what they want. We never ever push our own products, which is a big differentiating factor between us and a number of other banks. It takes away revenue from us. That's fine.
But you have to generate revenue somewhere.
If it's an issue, we are able to [charge] clients an advisory fee. Our typical client isn't one that wants to save a few cents. They admire the advice we give.
As a subsidiary of a larger bank, how do you maintain your independence?
Don't do anything silly - like, I tell my colleagues not to get me into trouble. We want to make money, but I don't really want to make money and have troubles. As far as our parent is concerned, we are probably the most compliant subsidiary they've ever seen. I have my famous saying: "If in doubt, stay out."
Your mantra sounds noble but there's got to be pressure for higher profits.
There's always pressure, but it all depends on how you react. Do the shareholders need to make 9 cents per share or can they survive with 8 cents? Do we get clients into trouble? The bank into trouble? Maybe not. Some bigger firms in the US decided to do a few silly things. We want to avoid that reputation, and I've managed to do it very well.
Recent regulations from the Central Bank have curbed certain fees and capped loans. What parts of your business have they hurt the most?
Like I said, you have to manage. In Bahrain, I have to inform the regulator pre-fact what I'm selling. In Oman, post-fact. We have to live with regulations. There's no point in rebelling against regulations. If they are coming down they're for a good cause.
But how do you recoup fees you would have otherwise received?
What the regulator is trying to do is get some of the hidden or unknown costs out of transactions. You go to the client and say: "The regulator says I can't do this, but I need to make money [and will charge an advisory fee] otherwise I won't be in business." And the client decides to pay us.
* Neil Parmar
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
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.”
COMPANY%20PROFILE
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HEADLINE HERE
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MATCH INFO
Uefa Champioons League semi-final, first leg:
Liverpool 5
Salah (35', 45 1'), Mane (56'), Firmino (61', 68')
Roma 2
Dzeko (81'), Perotti (85' pen)
Second leg: May 2, Stadio Olimpico, Rome
The specs
Engine: 1.5-litre 4-cylinder petrol
Power: 154bhp
Torque: 250Nm
Transmission: 7-speed automatic with 8-speed sports option
Price: From Dh79,600
On sale: Now
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
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Company%20Profile
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Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5
The story of Edge
Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, established Edge in 2019.
It brought together 25 state-owned and independent companies specialising in weapons systems, cyber protection and electronic warfare.
Edge has an annual revenue of $5 billion and employs more than 12,000 people.
Some of the companies include Nimr, a maker of armoured vehicles, Caracal, which manufactures guns and ammunitions company, Lahab
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