Superyacht eclipses her competitors

In the race for bigger and better on the open sea, a Dubai craft considered to be the world's largest yacht has been eclipsed. The Russian oligarch Roman Abramovich unveiled his 558ft (170-metre) vessel, the Eclipse, in Germany last week, overshadowing the Dubai, owned by Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai. When fully completed in 2010, the Eclipse will out-nose the Dubai by about nine metres.

The Eclipse was put to sea close to the shipyard where the it has been under construction for the past two years, according to the German newspaper Hamburger Morgenpost. The Dubai has been making waves since 2006, when Sheikh Mohammed acquired the vessel, originally commissioned by Prince Jefri of Brunei. According to Platinum Yachts, the Dubai-based builder, the Dubai can accommodate 115 people and boasts a swimming pool, spa bath, outdoor areas, two heli-observation rooms and VIP suites.

By comparison, the Eclipse has a private submarine, armoured hull, bulletproof windows and a missile deflection system to provide protection against pirates. She also has more comfort-focused amenities, such as a cinema, library, garden and restaurant. Mr Abramovich has three other yachts. He also owns Chelsea football club and was recently listed by Forbes Magazine as the 51st richest man in the world, with an estimated net worth of US$8.5 billion (Dh31.2bn).

Sheikh Mohammed's office did not respond to a request for comment. Meanwhile, a Dubai company plans to build a yacht to rival the Eclipse in size. The boat is to be 170m long and built by Aquiva, a sub-division of the Khalid al Gurair group. The yacht is to be moored at Thames Quay, adjacent to the Canary Wharf business district and opposite a new development of luxurious housing, boutiques and restaurants. It is designed to be a floating hotel so large it will be hauled into place rather than be powered by its own engine.

jgerson@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.”

Superyacht eclipses her competitors

The Russian oligarch Roman Abramovich unveiled his 558ft (170-metre) vessel, the Eclipse, in Germany last week.

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