Set aside, for a moment, the truth behind Kanye West's claim to be many millions of dollars in debt. A few weeks ago, the rap star and compulsive Twitter user complained that his various artistic initiatives and entrepreneurial spirit had left him hurting for cash.
That was, as it turns out, overstating it. His business managers and accountants, it was revealed, were guilty of presenting to him some financial details in the most alarming way possible. They measured the cost to him – in terms of time and resources and various other metrics – of his many ancillary investments and plotted them against his annual income, and came up with a terrifying, but theoretical, deficit.
Instead of accomplishing what they intended, which was a sober and thoughtful refocusing of his efforts towards highly remunerative things like recording and distributing music, and away from things like becoming the new creative director of the French fashion house Hermès – something West has openly campaigned for – it sent the music superstar into a money panic and a Twitter spiral.
It was all an overreaction. West still, in his words, has plenty of money on hand for “furs and houses for my family”, which I’m sure allows all of us to breathe sighs of relief. But the financial lesson he says he learnt, the hard way, is that whenever possible, when faced with exciting and tantalising investment opportunities, attempt to use someone else’s money.
In Hollywood, this is a fundamental law. Entertainment is what we call an “OPM” business – “other people’s money” – because most ventures fail (this is true of many businesses) and the best way to fail is to fail on someone else’s tab. The economic model will be familiar to anyone in the venture capital business: invest in enough projects, even really crazy way-out ones and you’re bound to have one or two that really pay off. It’s those hits that pay for all of the failures. But in order to get to the hits you have to be able to weather the losses of the failures, which means you need money, and lots of it. And this is where investors come in.
The chief benefit of investors is, of course, that they have piles of money – and here I’m using the term “investor” in the broadest sense: it could be a bank or a venture fund or wealthy uncle or, in my case, a television studio – but aside from that, an almost equal benefit to having investors is that you have to explain to someone else why, exactly, you need the money and how, precisely, you’re going to make it back.
Kanye West – and I confess that I have never met the man, this is just my general impression – isn’t someone used to a lot of negative feedback from his inner circle. Something tells me it’s pretty much a one-way conversation when Kanye wants something. Kanye World, to use the phrase currently fashionable, is probably not a “safe space” where dissent and critical inquiry is frequent.
Again, I don’t know this. But I have a very strong feeling that it is so.
Luckily for Kanye West, and his fur-loving and house-receiving family, his business advisers managed to get through to him. After the initial shock of his massive debt wore off, West began tweeting aggressively to various well-known billionaires – people like Mark Zuckerberg, the staggeringly rich impresario of Facebook – all but demanding that they give him the money he needs, plus more, to “bring more beautiful ideas to the world”. In other words, Kanye West discovered the concept of OPM.
Brilliantly talented comedian and writer Louis CK – his comedy, Louie, is a critical and audience favourite on television – has recently learnt the same lesson. A year or two ago, Louis CK discovered how lucrative it was to fund his own projects. He released two video specials online to his audience – they paid him directly, without a network or a studio or any kind of middleman – and he allowed them to download his work onto whatever device they preferred. It was an astonishing feat. He was an instant hero to every writer and performer who had ever faced a line of unsmiling studio executives or naysaying network programmers, which is to say every writer and performer.
Just do it yourself, was the message. You don’t need executives and investors and meddling money men.
This week, though, Louis CK announced that he was deeply in debt. His tone and demeanour were a lot more emotionally stable than Kanye West’s, but the story was essentially the same. Louis CK had invested in additional projects – his own money, no OPM involved – and one of them hadn’t been nearly as successful as he had expected, which had led to losses.
Kanye West and Louis CK are both, in their different ways, supremely gifted. Both of them have long and lucrative careers in front of them. But both now are wiser and smarter about when to use their own money and when to use OPM: never and always.
Rob Long is a writer and producer in Los Angeles
On Twitter: @rcbl
The specs
Engine: Long-range single or dual motor with 200kW or 400kW battery
Transmission: Single-speed automatic
Max touring range: 620km / 590km
Price: From Dh250,000 (estimated)
How it works
Each player begins with one of the great empires of history, from Julius Caesar's Rome to Ramses of Egypt, spread over Europe and the Middle East.
Round by round, the player expands their empire. The more land they have, the more money they can take from their coffers for each go.
As unruled land and soldiers are acquired, players must feed them. When a player comes up against land held by another army, they can choose to battle for supremacy.
A dice-based battle system is used and players can get the edge on their enemy with by deploying a renowned hero on the battlefield.
Players that lose battles and land will find their coffers dwindle and troops go hungry. The end goal? Global domination of course.
TRAP
Starring: Josh Hartnett, Saleka Shyamalan, Ariel Donaghue
Director: M Night Shyamalan
Rating: 3/5
More coverage from the Future Forum
UNpaid bills:
Countries with largest unpaid bill for UN budget in 2019
USA – $1.055 billion
Brazil – $143 million
Argentina – $52 million
Mexico – $36 million
Iran – $27 million
Israel – $18 million
Venezuela – $17 million
Korea – $10 million
Countries with largest unpaid bill for UN peacekeeping operations in 2019
USA – $2.38 billion
Brazil – $287 million
Spain – $110 million
France – $103 million
Ukraine – $100 million
Company%20Profile
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COMPANY%20PROFILE
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Cultural fiesta
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich 1
Kimmich (27')
Real Madrid 2
Marcelo (43'), Asensio (56')
The specs
Engine: 0.8-litre four cylinder
Power: 70bhp
Torque: 66Nm
Transmission: four-speed manual
Price: $1,075 new in 1967, now valued at $40,000
On sale: Models from 1966 to 1970
The Outsider
Stephen King, Penguin
The bio
Favourite food: Japanese
Favourite car: Lamborghini
Favourite hobby: Football
Favourite quote: If your dreams don’t scare you, they are not big enough
Favourite country: UAE
Company%20Profile
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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.
COMPANY%20PROFILE%20
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SPECS%3A%20Polestar%203
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The Bio
Hometown: Bogota, Colombia
Favourite place to relax in UAE: the desert around Al Mleiha in Sharjah or the eastern mangroves in Abu Dhabi
The one book everyone should read: 100 Years of Solitude by Gabriel Garcia Marquez. It will make your mind fly
Favourite documentary: Chasing Coral by Jeff Orlowski. It's a good reality check about one of the most valued ecosystems for humanity
COMPANY%20PROFILE%20
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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.”
The specs
Engine: 2-litre or 3-litre 4Motion all-wheel-drive Power: 250Nm (2-litre); 340 (3-litre) Torque: 450Nm Transmission: 8-speed automatic Starting price: From Dh212,000 On sale: Now
SPECS
%3Cp%3E%3Cstrong%3EEngine%3A%20%3C%2Fstrong%3E4-litre%20V8%20twin-turbo%0D%3Cbr%3E%3Cstrong%3EPower%3A%20%3C%2Fstrong%3E630hp%0D%3Cbr%3E%3Cstrong%3ETorque%3A%20%3C%2Fstrong%3E850Nm%0D%3Cbr%3E%3Cstrong%3ETransmission%3A%20%3C%2Fstrong%3E8-speed%20Tiptronic%20automatic%0D%3Cbr%3E%3Cstrong%3EPrice%3A%20%3C%2Fstrong%3EFrom%20Dh599%2C000%0D%3Cbr%3E%3Cstrong%3EOn%20sale%3A%3C%2Fstrong%3E%20Now%0D%3C%2Fp%3E%0A
FIGHT CARD
Sara El Bakkali v Anisha Kadka (Lightweight, female)
Mohammed Adil Al Debi v Moaz Abdelgawad (Bantamweight)
Amir Boureslan v Mahmoud Zanouny (Welterweight)
Abrorbek Madaminbekov v Mohammed Al Katheeri (Featherweight)
Ibrahem Bilal v Emad Arafa (Super featherweight)
Ahmed Abdolaziz v Imad Essassi (Middleweight)
Milena Martinou v Ilham Bourakkadi (Bantamweight, female)
Noureddine El Agouti v Mohamed Mardi (Welterweight)
Nabil Ouach v Ymad Atrous (Middleweight)
Nouredin Samir v Zainalabid Dadachev (Lightweight)
Marlon Ribeiro v Mehdi Oubahammou (Welterweight)
Brad Stanton v Mohamed El Boukhari (Super welterweight
Company%20Profile
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What is graphene?
Graphene is extracted from graphite and is made up of pure carbon.
It is 200 times more resistant than steel and five times lighter than aluminum.
It conducts electricity better than any other material at room temperature.
It is thought that graphene could boost the useful life of batteries by 10 per cent.
Graphene can also detect cancer cells in the early stages of the disease.
The material was first discovered when Andre Geim and Konstantin Novoselov were 'playing' with graphite at the University of Manchester in 2004.
Blackpink World Tour [Born Pink] In Cinemas
Starring: Rose, Jisoo, Jennie, Lisa
Directors: Min Geun, Oh Yoon-Dong
Rating: 3/5
THE SIXTH SENSE
Starring: Bruce Willis, Toni Collette, Hayley Joel Osment
Director: M. Night Shyamalan
Rating: 5/5
Confirmed%20bouts%20(more%20to%20be%20added)
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MATCH INFO
Uefa Champions League semi-final, first leg
Barcelona v Liverpool, Wednesday, 11pm (UAE).
Second leg
Liverpool v Barcelona, Tuesday, May 7, 11pm
Games on BeIN Sports
The specs
Engine: 2.7-litre 4-cylinder Turbomax
Power: 310hp
Torque: 583Nm
Transmission: 8-speed automatic
Price: From Dh192,500
On sale: Now