Illustration by Chris Burke for The National
Illustration by Chris Burke for The National

K Rajaram: the real deal when it comes to Porsche sales



K Rajaram once bought every ticket for a showing of Schindler's List at the Odeon Kensington cinema in London for himself and his friends.
"I was one of the only guys in the movie theatre who watched what I thought was one of the greatest movies ever made," he says. "It was just fascinating."
Upon hearing this anecdote, two things are immediately clear about Mr Rajaram, the chief executive of Al Nabooda Automobiles.
The first is that he can be extremely extravagant - the meeting room on the way into his office is reminiscent of a nightclub, complete with dimmed glitzy lights.
And the second is that he has great taste in films.
"I bought every single ticket. It was a question of timing and one of my friends knew the guy who ran the Odeon and he put on an extra show for us."
The K in K Rajaram is the initial of his father's name, which he says is too long to disclose. But his West Highland terrier's passport also has the name K Rajaram on it and in this instance, the K stands for Kuddles.
In November, Mr Rajaram will open the world's biggest Audi showroom and his company is also building a shiny new outlet for Porsche. Al Nabooda sells Porsche, Audi and Volkwagen cars in Dubai and the Northern Emirates.
He is the best-selling Porsche dealer in the world and, in total, Al Nabooda is spending nearly Dh1 billion (US$272.2 million) on new showrooms and facilities around the country over the next two and a half years.
But does he really need the biggest Audi showroom in the world?
"Have you not seen this map?" he replies, with more than a hint of sarcasm, pointing to the map behind him in his office. It is the planned map of Dubai before the property downturn, complete with three different palms, a sprawling Dubai Land development and something called The Universe that winds around The World project.
It is more a warning than a map. A souvenir of the halcyon days of excess financing and property boom.
"You have the waterway, which then disappeared, it's got the islands and the third Palm," he says.
"We give it to a lot of our friends as a gift so they remember what Dubai should have looked like."
Mr Rajaram speaks with much animation, gesticulating and letting his voice rise and fall like an actor on stage pursuing a dramatic point. He is a big man but softens his appearance with a red handkerchief.
He says, from a business perspective, Al Nabooda needs a huge Audi showroom because, where the company used to sell four models, it now offers 17.
"Let me put it this way, we are the largest Audi dealer in the entire region," he says. "By far the largest. Now, Audi also needs us to put up a showroom for the region and world. We can't turn round to the customer and say, 'Come and have a look at [the car] in my stockyard.' Not when he is paying Dh300,000 for the car."
Mr Rajaram is a loyal buyer of his brands, owning at least one of each. Family members are not allowed to buy a rival brand. He snorts at the notion of owning anything other than Volkswagen, Audi or Porsche.
"Never, never. And nor is my family allowed to touch one. Never," he says, reminiscent of Winston Churchill giving one of his classic wartime speeches.
"In my three brands, I have everything that the world needs, whether it is an SUV car, a saloon car, or a sports car," he says. "Why do I need to go out?" But he does go out and about using other vehicles, only they sport two wheels - he is passionate about cruiser motorcycles.
"Until the year before last, I had nine. I'm now down to three. I've kept only the three, which are close to my heart or have a story to tell."
He shows the Honda Valkyrie Rune on his computer screen. It looks imposing. So much so, his wife, who bought him the bike for his 50th birthday, calls it Judge Dredd's bike, after the comic-book character of the same name.
"The other one I kept is a Harley-Davidson Fat Boy, mainly because that bike I built from the ground up. It does not look like the Fat Boy at all," he says. "And the last bike I kept was a BMW because I just love the way it runs."
But at 57, Mr Rajaram has been told by his doctor to curb his passion for riding bikes.
"The decisions you can make at 140km at 35 years old are a little different from the decisions you make when you are 55 years old," he says ruefully.
"It takes you that fraction of second longer and that is the fraction of a second you don't have on a bike. That's the difference between life and death."
Born in Mumbai, where his father was the managing director for American Pharmaceutical Company, at 18 Mr Rajaram went to train as a metallurgical engineer in Chennai before returning to Mumbai to study for an MBA.
After graduating, he began working for a company that was asked to run Budget Rent A Car in Muscat. The local Omani partner also sold Volkswagen and Audi cars and Mr Rajaram was soon asked to run the flagging dealerships. "I was there for 16 years until 1996," he says.
Mr Rajaram was about to head back to India to set up an Audi and Volkswagen dealership in Mumbai when he had a chance encounter with Khalid Khalifa Al Nabooda, the managing director of Khalifa Juma Al Nabooda Group, the parent company of Al Nabooda Automobiles.
"He said, 'Why don't you stay back for a couple of years?' and that's it, three years has now become 15. It's not a job any more, this is my family ."
Mr Rajaram is now largely hands-off in running the dealerships. But a few weeks ago, he closed the showrooms and took all 900 staff on a team-building day. But he leaves the daily stuff to his staff.
"You have a . general manager and pay him Dh100,000 a month for what?" he says. "He's got to get on and do his job. I would not like someone breathing down my neck."
Al Nabooda buys 700 to 800 cars a month at an average of Dh300,000 each, as the dealership tries to keep up with demand. If you order a Porsche Cayenne today, you will not get it until March, the car is so popular.
Mr Rajaram taps a huge lighter on the deskas he explains he used to smoke about 60 cigarettes a day but now only puffs the occasional cigar.
"One day I said enough was enough. I don't want to [smoke] any more," he says. "I distinctly remember we were on holiday in Langkawi [in Malaysia] and when I was checking out of the Four Seasons, I left the cigarettes on the table and just walked out."
It is another insight into the fierce drive of the man who rules the world - at least when it comes to selling Porsches and showing Audis.
rjones@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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