GFH Financial Group (GFH) has completed a debt-restructuring agreement with the developer of a long-delayed US$700 million project in Bahrain.
In a statement to the Dubai stock exchange yesterday, GFH said it had signed a final sukuk-restructuring agreement with Bahrain-based Gulf Holding Company (GHC), the developer of the Villamar project close to the Bahrain Financial Harbour complex and Al Rajhi Bank, the project’s original financier.
GFH said that under the new agreement it would fund the completion of the 35,900 square metre upmarket housing and hotel project by injecting cash up to $50m.
In August GHC said it was restarting work on the stalled project after it agreed a restructuring deal with support from Al Rajhi Bank, new funder GFH and the contractor, UAE-based Al Hamad Contracting.
The project comprises three twisting towers of 54, 52 and 43 storeys, which are to contain a hotel and apartments.
As a result of the agreement, GHC said cranes had been moved back on to the site to restart work and the project is now due for completion in the summer of 2018.
Villamar was initially launched in 2007, when GHC awarded a $380m construction contract to Sharjah-based Al Hamad Contracting.
Initially it was due for completion in the first quarter of 2010, but stopped midway through construction as the financial crisis caused projects to stall across the Arabian Gulf.
However, in February, Bahrain’s government announced that it had passed a law aimed at restarting many of the kingdom’s major stalled property projects, and in July the deputy premier, Sheikh Khalid Al Khalifa, who also heads Bahrain’s ministerial committee on reconstruction and infrastructure, held a meeting aimed at advancing Villamar’s future.
lbarnard@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.
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“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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