ABU DHABI //The Emirates and Brazil are in talks to increase their ties in trade, green-energy technology, joint projects abroad and cultural exchanges.
The new Brazilian ambassador to the UAE, Joao de Mendonca Lima Neto, said links between the two nations had deepened since a visit to his country by Sheikh Abdullah bin Zayed, the Minister of Foreign Affairs, in March.
"A high-level visit to Brazil by Sheikh Abdullah … has established consultative ties between the two nations," Mr Neto said.
"This new consultative mechanism should help us to enhance our dialogue with the UAE as we consider it a key partner in the Middle East."
The UAE is the second-largest importer of Brazilian products in the Arab world, figures released yesterday by the Arab-Brazilian Chamber of Commerce show. In the first quarter of this year, the UAE imported products including sugar, meats, cereals and vegetable oils to the value of Dh3 billion.
"Later this year, we should be organising a joint political consultations commission, which will probably be here in Abu Dhabi," said Mr Neto, who became ambassador to the UAE four months ago.
He said he hoped the two nations would work together on development projects in Africa and Asia.
"In Asia, for example, we established a project with India and South Africa to develop rice seeds in the central Vietnam," Mr Neto said.
"The UAE has many projects abroad in development, aid and investment. Brazil has that too, and I think it would be a good idea to get together and do something."
The two countries are also talking about green technology, Mr Neto revealed."I think research is extremely important as we have lots of common ground that we have to explore before we start in any project," he said.
Mr Neto, who has also been based in Vietnam, China and Japan, wants a special focus on free-flowing cultural exchange between the two countries.
"The most important thing is to enhance our dialogue in every field - not just commercial and investment, but also in the cultural side which is very important," he said.
"When I was in Japan in the '90s, we set up a programme to send Japanese children to football schools in Brazil.
"We would like to do the same thing with the UAE, be it in football or jiu-jitsu, because sport is one of the most effective ways for cultural exchange."
amustafa@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.
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.”
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