Iranian Foreign Minister Hossein Amirabdollahian visited Abu Dhabi. Reuters
Iranian Foreign Minister Hossein Amirabdollahian visited Abu Dhabi. Reuters
Iranian Foreign Minister Hossein Amirabdollahian visited Abu Dhabi. Reuters
Iranian Foreign Minister Hossein Amirabdollahian visited Abu Dhabi. Reuters

Iran says relations with UAE turning ‘new page’


Mina Aldroubi
  • English
  • Arabic

Relations between the UAE and Iran are turning a “new page”, Tehran’s top diplomat said during a visit to Abu Dhabi this week.

Iranian Foreign Minister Hossein Amirabdollahian visited the Emirates to offer his condolences on the death of UAE President Sheikh Khalifa.

“Opening a new page in the relations of the Islamic Republic of Iran and the United Arab Emirates. The strengthening of ties with our neighbours disappoints regional enemies,” Mr Amirabdollahian said on Twitter.

Iran's President Ebrahim Raisi also sent his condolences to UAE leaders on the death of Sheikh Khalifa and congratulated the President, Sheikh Mohamed, on his election.

Mr Raisi said he hopes relations between the countries can grow in all fields.

World leaders and dignitaries have travelled to Abu Dhabi over the past few days to offer condolences and support.

Crown Prince Mohammed bin Salman of Saudi Arabia, Britain's Prince William, US Vice President Kamala Harris and US Secretary of State Antony Blinken are among those who have come to pay their respects.

The visit by Mr Amirabdollahian is the highest-level trip by an Iranian official to the Gulf in years.

The UAE has been exploring the idea of greater engagement with Iran.

Last November, Ali Bagheri Kani, Iran's deputy foreign minister, visited the UAE and said the two countries had agreed to open a new chapter in bilateral relations.

Mr Kani, who is also Iran's top nuclear negotiator, met the UAE's Dr Anwar Gargash, who was the diplomatic adviser to Sheikh Khalifa, and Khalifa Al Marar, Minister of State.

Following the meeting, the UAE's state news agency Wam said the talks had “emphasised the importance of strengthening relations on the basis of good neighbourliness and mutual respect”.

“This should coincide within the framework of common interest and working towards achieving regional stability, prosperity, as well as developing economic and trade relations,” said a statement from the agency.

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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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