Yemeni pro-government forces ride in the back of a pickup truck in the port city of Hodeidah. AFP
Yemeni pro-government forces ride in the back of a pickup truck in the port city of Hodeidah. AFP

US official reaffirms commitment to Arab Coalition's Yemen operation



A United States official has reaffirmed the country's commitment to supporting the Arab Coalition's operation in Yemen, amid calls to distance itself from the campaign to beat back Iran-backed Houthi rebels.

US Deputy Assistant Secretary for Arabian Gulf Affairs, Timothy Lenderking, said the country "strongly opposes" discontinuing support to the Saudi-led coalition in Yemen.

"Obviously there are pressures in our system...to either withdraw from the conflict or discontinue our support of the coalition, which we are strongly opposed to on the administration side," Mr Lenderking told the UAE Security Forum 2018 in Abu Dhabi.

"We do believe that the support for the coalition is necessary. It sends a wrong message if we discontinue our support," he said.

The United State's support for the Arab Coalition has come under increased scrutiny from within the US following the killing of dissident journalist Jamal Khashoggi at the kingdom's Istanbul consulate.

Last month, the United States Senate voted to advance legislation to end the country's support for the war in Yemen.

The United States, along with the United Kingdom and France support the Saudi-led coalition in the war in Yemen.

Mr Lenderking also said UN-sponsored peace talks between the warring parties that started last week in Sweden, the first in two years, were a "vital first step" in ending the conflict that has killed tens of thousands of people.

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Read more:

Yemen's warring parties still at odds over key agenda items as talks enter third day

Exclusive: Mesa to include nine countries while prioritising Iran threat

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The coalition intervened in the conflict in 2015 after Houthi-rebels took over the capital Sanaa, forcing the internationally recognised president, Abd-Rabbu Mansour Hadi, to flee.

The war has led to a dangerous humanitarian crisis, which the UN warns could be one of the worst famines in history.

Leap of Faith

Michael J Mazarr

Public Affairs

Dh67
 

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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