Kagan McLeod for The National
Kagan McLeod for The National
Kagan McLeod for The National
Kagan McLeod for The National

Newsmaker: Vitali Klitschko


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Earlier this week, Vitali Klitschko officially vacated his title as World Boxing Council (WBC) heavyweight champion of the world. Klitschko was retiring from the ring, but not from fighting. In leaving boxing, he was merely taking his pugilistic skills to a larger stage and a potentially fiercer opponent.

Since announcing last month that Ukraine would not enter a free-trade deal with the European Union, the Ukrainian president Viktor Yanukovych has faced a growing outcry. Protesters have gathered in Kiev’s Independence Square, demanding Yanukovych’s resignation and a renewed effort at economic integration with the EU. Leading the charge against Yanukovych has been an array of opposition leaders, with Klitschko perhaps the most prominent among them. Klitschko has called for the dissolution of the government, and might stand to be the politician most likely to benefit from the president’s removal. Could the 42-year-old boxing champion be the next leader of Ukraine?

Vitali Klitschko was born on July 19, 1971, in Belovodsk, Kyrgyzstan, which was then part of the Soviet Union. His father was a general in the Soviet air force, and his mother was Russian by birth. Klitschko spent parts of his childhood in Czechoslovakia and Central Asia. He took up kick-boxing as a child and rapidly ascended to the sport’s highest reaches. He held a world championship title in kick-boxing on six occasions, both as an amateur and a professional, before trying his hand at boxing. Six-foot-seven and 250 pounds, Klitschko was known for a cautious style, which depended on the force of his punches, and his tactical savvy.

In 1996, Klitschko was selected to represent Ukraine at the Summer Olympics, before he was kicked off the team for having used illegal steroids. He later said that he had taken steroids after injuring himself in a kick-boxing match. His younger brother Wladimir went in his stead and won the gold medal in the superheavyweight division.

At the same time, Vitali was accepted into a doctoral programme in sports science at Taras Shevchenko National University of Kiev. Klitschko worked on his dissertation while also pursuing a professional career as a boxer, primarily living and training in Germany. In 1999, Klitschko knocked out Herbie Hide in the second round to win the World Boxing Organisation (WBO) heavyweight belt. After beginning his career with 27 straight knockout victories, Klitschko suffered his first loss in 2000, when a shoulder injury forced him to quit a fight against Chris Byrd. That same year, Klitschko successfully defended his dissertation. Klitschko’s twin pursuits gave him the nickname Dr Ironfist. (Wladimir Klitschko, who is currently the WBA, IBF and WBO heavyweight champion, also holds a doctorate in sports science – he has been dubbed Dr Steelhammer.)

Klitschko lost his next championship bout, against Lennox Lewis – he was forced to quit after Lewis opened a cut above his left eye that would later require 50 stitches. He won the crown in 2004 after Lewis refused to defend his title, and Klitschko defeated Corrie Sanders. But boxing always exchanged jabs with politics and patriotism for the upper hand in Klitschko’s affections. During the Orange Revolution of 2004, Klitschko gave serious consideration to bowing out of a title fight against Danny Williams before receiving a call from the then-opposition leader Viktor Yushchenko, convincing him to fight. “We are involved in Ukraine politics and it touches everyone,” Klitschko said at the time. “It is very painful to read some news and the way they speak about Ukraine like it is a poor country, like a banana republic.” Klitschko fought in orange, in honour of the Ukrainian protesters, and the fight was broadcast in Independence Square. When he won, he dedicated his victory to democracy.

In 2005, he announced his retirement from boxing after damaging his anterior cruciate ligament while training for a fight with Hasim Rahman. The president of the WBC suggested that he might be using injury concerns to avoid fighting.

The next year, Klitschko returned to Ukraine after living in Los Angeles, and ran for mayor of Kiev. He campaigned on an anti-corruption, pro-European platform, using his celebrity and cosmopolitan background to boost his appeal. “I’ve been to many parts of the world and I know by comparison that there’s a better way of life in the United States and in Europe than there is here,” he said. “The traffic in Kiev is terrible because we don’t have real highways for cars to travel. My home is about a mile away from my office and sometimes it takes me an hour to get to work. There’s traffic in New York and Los Angeles, but nothing as incredible as this.” He finished second in the election, but won a seat on the city council.

Klitschko’s prominence, and his having earned his money legally, lent him an aura of being above the pettiness of politics. “I am not entering politics to make money,” he told a crowd last year. “I don’t need money.” Klitschko campaigned in a Volkswagen minivan and took questions at his appearances – both rarities in the elitist world of high-level Ukrainian politics.

He lost his second bid for the mayoralty, as well, but, in 2010, he helped to establish a new party called Udar, which stands for the Ukrainian Democratic Alliance for Reforms, and perhaps just as significantly means “punch” in Ukrainian. The party brought Klitschko together with other prominent opposition figures (although it stood in deliberate, marked contrast to the All-Ukrainian Union “Fatherland” party of the former prime minister Yulia Tymoshenko). Udar performed better than expected in 2012’s parliamentary elections and currently holds 42 of 450 seats in the Ukrainian legislature.

Klitschko is the head of a party with roots that are as much Russian as they are Ukrainian. Like many older Ukrainians, he grew up speaking Russian, and his command of Ukrainian is still faulty at times. He recently hired a tutor to assist him with the language, which he speaks at public appearances.

Since the protests against Yanukovych began, Klitschko has made regular appearances in Independence Square, calling for the release of arrested demonstrators and for the resignation of the entire government. He has sought to walk the thin line between protest and provocation, avoiding any action that might prompt the government to use force against him or his followers. Udar helped to set up a camp just outside the square, and Klitschko convinced police officers armed with a backhoe not to dismantle their site. He brought soup to riot police stationed nearby.

Some of the tactics of Klitschko’s earlier career came in handy for his new profession. In a video on YouTube, he appeared in a crowd of protesters, wielding a megaphone, and in the words of a Radio Free Europe blogger, used “a pre-fight stare-down” to intimidate a heckler. Last week, Yanukovych met with opposition leaders, but Klitschko, for one, was unimpressed: “Today, the authorities have not considered any of the opposition’s demands … This round table was for show.”

Yanukovych’s failure to sign the EU agreement and his heavy-handed repression has borne out Klitschko’s long-standing critique of the president, repeatedly stated during last year’s campaign, as backward-facing and beholden to Russia. But the Russian President Vladimir Putin’s announcement of a US$15 billion (Dh55.1bn) economic bailout for Ukraine, along with substantial discounts on natural-gas purchases, has given new momentum to Yanukovych, and it’s unclear whether Klitschko, or any other opposition figure, will be capable of ousting him. Giving up his championship belt, though, is an indication of Klitschko intentions. “The offer of the WBC gives me the theoretical possibility to return to the boxing ring, which I cannot imagine at all in the current state,” Klitschko said in a statement. “Right now, my full concentration is on politics in Ukraine and I feel that the people need me there.”

Klitschko is attempting to mobilise the forces of the Ukrainian opposition in his corner. The Orange Revolution, which had seemed to boot the forces of post-Soviet authoritarianism and oligarchy from power, collapsed into infighting between its two primary leaders: Yushchenko and Tymoshenko. Handsome, famous and wealthy, Klitschko is a logical figure to make the ascent to the national stage. His pro-Europe stance appeals to the more cosmopolitan, Ukrainian-speaking west, and his status as a national sporting hero may appeal to the more conservative, Russian-speaking east.

Even before the current round of unrest, Klitschko mused openly about running against Yanukovych for president in 2015. “My main goal is for Ukraine to be a European, modern country with European standards of life,” he told the BBC in August. “I will decide with people who have the same vision, the same dream, to go into politics and from the inside to change the situation.”

But Yanukovych is a wilier, more potentially damaging opponent than even Lennox Lewis ever was. “Ukrainian politics doesn’t have rules,” Klitschko said. “It’s not like boxing.”

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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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