Aliko Dangote, Africa’s richest man, plans to buy London-based Arsenal football club within four years.
Mr Dangote, a Nigerian worth US$10.9 billion, according to the Bloomberg Billionaires Index, said he needs to wait for his business prospects to improve and his investments in gas pipelines and an oil refinery to play out before making the acquisition.
He said in New York today “there’s no doubt” he would buy Arsenal and “it’s not a problem” of money. “Maybe three to four years. The issue is that we have more challenging headwinds. I need to get those out the way first and start having tailwinds. Then I’ll focus on this.”
Mr Dangote, an Arsenal fan, has lost $4.4bn this year, the fourth most of anyone globally, due mainly to the depreciation of Nigeria’s currency, the billionaires index shows. The bulk of his wealth is tied up in Lagos-based Dangote Cement, whose stock is down 4.7 per cent this year. An acquisition of the team would make him the first African owner of a team in England’s Premier League.
“It’s not about buying Arsenal and just continuing with business as usual,” he said. “It’s about buying Arsenal and turning it around. I’ve run a very successful business and I think I can also run a very successful team. Right now, with what we’re facing, over $20bn of projects, I cannot do both.”
While Arsenal has won 13 top-flight league titles in England, making it one of the country’s most successful sides, its last was in 2004.
Arsenal Holdings, the owner, trades on the ICAP Securities & Derivatives Exchange, or ISDX, and has a market capitalisation of £1bn (Dh4.79bn).
Stan Kroenke, worth $7bn and the owner of the National Basketball Association’s Denver Nuggets, holds 67 per cent of Arsenal Holdings, according to data compiled by Bloomberg, and the club’s primary sponsor is Emirates, after which its home ground stadium is also named.
Fans of the Gunners, as the club is known, would probably welcome a fresh billionaire with plans to restore it to the top of the table after long complaining not enough money has been spent in the players transfer market to enable the club to properly challenge teams such as Abu Dhabi’s Manchester City and their crosstown rivals Manchester United, or Europe’s top clubs such as Barcelona in the Champions League.
Most English Premier League matches are broadcast live in Nigeria, Africa’s most populous country, by Supersport, a satellite television channel owned by South Africa’s Naspers.
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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.”
