The inaugural winner of the refashioned 1,200-metre Al Quoz Sprint on Dubai World Cup night will have a new race to point towards after Racing New South Wales on Wednesday unveiled The Everest, a A$10 million (Dh27.81m) sprint to be staged at Royal Randwick Racecourse in the autumn.
Hot on the heels of the US$12m (Dh44m) Pegasus World Cup, won last week by Arrogate, the new Australian race requires 12 connections to stump up an entry fee of A$600,000.
Once an interest has been purchased, connections can proceed to sell on their berth should they so wish to interested parties. It was how owners Juddmonte secured a berth for Arrogate in the Gulfstream Park race.
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■ More: Furia Cruzada gets another chance at Meydan
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The winner of the 1,200m sprint, to be staged on October 17 in Sydney, receives A$5.8m, which eclipses the country’s famous Melbourne Cup and makes the contest the most valuable race on turf anywhere in the world.
The Dubai Sheema Classic and Dubai Turf were previously the two most valuable races on turf at US$6m each with a winner’s cheque of US$3.6m.
Much like the Pegasus World Cup, the prize pool will be funded partly by those who pay to enter, but it will also benefit from additional revenues such as television rights, if there are any, merchandising and so forth.
It is clear that organisers are looking beyond their borders for challengers.
“The Everest will be a game-changer for racing in Sydney and provide a stage for showcasing the best Australian sprinters against leading international contenders,” said Russell Balding, chairman of Racing NSW.
Taking on Australian sprinters in their own backyard is not the wisest move for any owner or trainer, but the new race would allow international horses the luxury of staying on to target the lucrative sprints on offer during the Melbourne Cup Carnival.
The A$1m Manikato Stakes on October 27 at Moonee Valley, for example, and the A$1m Darley Classic, staged on November 11 on the straight at Flemington, are both Group 1 sprints over the same distance.
“This represents an innovative concept and a tremendous new event to promote thoroughbred racing to a broader audience,” said Peter V’landy’s, the Racing NSW chief executive.
“Being a sprint over Royal Randwick’s testing 1,200m circuit, The Everest is tailored to Australian racing.”
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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.”
