Category Archives: Asset Management

Financial reality more important than predictions

September 24, 2017 By in Asset Management Tags: ,

About a year ago I wrote about the UAE as a financial center and in particular compared it to Singapore. The article states:

Let’s go back to Singapore with a GDP of $293 billion and population of 5.5 million versus our GDP of $371 billion and population of 9 million. So not only is their market cap four times larger than ours as a percentage of GDP, but their GDP per capita is about $53,000 versus our $41,000. [Data source: The World Bank]

In short, the statistics indicated at that time that Singapore was far more efficient as a financial center.

Let’s move to the present day, a year later. A Dubai International Financial Center (DIFC) report, compiled in partnership with Thomson Reuters, was recently released. The DIFC report studied the wealth and asset management opportunities in the Middle East, Africa and South Asia region (Menasa). I got to page six of this 50+ page report and found some statistics that contradicted my view of the world. I summarise them in the table below.

Continue reading →

Activist investing would be a boon to the UAE

May 17, 2016 By in Asset Management Tags: ,

In my previous article I suggested, using scenes from the film A Beautiful Mind, that game the­ory could explain why more than 50 banks exist in an economy too small to commercially need such business. The idea is bas­ically that banks choose to be mediocre because competition would harm them to the benefit of customers.

The feedback was tremendous, and I would like to expand on some of the points made. The first is the concern that I might antagonise people in the banking system. I believe that transparency and open dialogue fosters a healthy commercial environment and that most people will listen if your intent is positive. The few people who have a closed mind might react negatively to new or open ideas. One just needs to accept that this exists and hope that the greater good outweighs any personal backlash.

Continue reading →

Karl Happe on Allianz’s investment strategies

November 15, 2015 By in Asset Management, Executive Insight Tags: , ,
Karl Happe on Allianz’s investment strategies

My co-author today is Karl Happe, chief investment officer of Allianz Global Investors’ Insurance Related Strategies. Although the strategies developed and deployed by Allianz are aimed at the insurance market, there are many important lessons that most investors would benefit from, in particular family offices.

Continue reading →

Brooke Coburn of Carlyle on Middle Market Investing

August 18, 2015 By in Executive Insight, Asset Management Tags: , , , ,
Brooke Coburn of Carlyle on Middle Market Investing

My co-author this week is Brooke Coburn, Managing Director and Co-Head of Carlyle Growth Partners and Carlyle Equity Opportunity Fund.

The Carlyle Group is one of the largest and most successful alternative asset managers in the world. With nearly USD 200 billion in assets managed across 130 funds and 156 fund of funds it is daunting just trying to figure out where to start in learning from their best in class experience. I decided to approach the middle market team and highlight their story as, I believe, investors in the Middle East can learn the most from their approach and experience.

Continue reading →

The Future of Asset Management in the GCC (Part 2)

March 26, 2015 By in Asset Management Tags: ,

In the second of a two part series, this column outlines a vision for the future of asset management in the GCC.

The asset management industry in the GCC has blindly followed developed market dictates. The main focus is listed equities. But the GCC markets have neither the depth or breadth to allow an active strategy to flourish. A passive strategy does not need asset managers.

The only other truly active asset class in the region is private equity (PE). PE managers have focussed predominantly on what they call late stage investing: buying shares of companies shortly before they list. This strategy has performed well on a few now famous deals. However, fund performance has been abysmal.

The problem here is where is the value creation? A firm that buys a company and quickly IPOs it is not an asset management firm but rather an investment bank that is providing underwriting and equity capital market services.

Continue reading →

The Future of Asset Management in the GCC (Part 1)

March 24, 2015 By in Asset Management Tags: ,

In the first of a two part series, this column will investigate the current state of affairs of the asset management industry. In part two, this column maps out the way forward.

The asset management business in the GCC has followed a puzzling evolutionary path focussed predominantly on listed equities with a smattering of funds investing in private equity (PE) and bonds whilst seeming to ignore other asset classes such as real estate (RE) which not only has exhibited good performance across the region, it also provides for strong cash flow income and appears to have the greatest demand from investors as exhibited by their direct investment demographics.

Continue reading →

Anthony Mallis on Building SICO into a Regional Asset Manager

November 30, 2014 By in Executive Insight, Asset Management Tags: ,
Anthony Mallis on Building SICO into a Regional Asset Manager

In the first of an occasional series titled Executive Insight I will write together with a regional business leader who shares the benefits of their experience.

Anthony Mallis, the chief executive of Securities & Investment Company (SICO) of Bahrain between 2001 to 2014, grew a boutique brokerage company into a regional asset management powerhouse. (Tony is humble in his accomplishments and all promotion of his accomplishments is attributable solely to his co-author.)

Mr Mallis was hired to a challenging assignment; turn around or close a money-losing entity that was caught short by the GCC market malaise of the late ‘90s. In 2001 the GCC and Mena capital markets were still nascent, with the Gulf still affected by low oil prices and mid-’90s collapsed share prices. Locally, commercial banks had little interest in the domestic capital markets, focusing on deposit-gathering, the local retail markets and pushing third-party foreign investment products to their clients. The small number of local investment banks had a largely real estate focus, or were parochial when it came to regional investments – focusing on their domestic markets for both clients and proprietary activities. Continue reading →