Kalba off the bottom thanks to Dufrennes' double

MADINAT ZAYED // On a warm and windy night in this oasis of humanity in the Western Region, a few miles north of the rolling dunes that mark the start of the Empty Quarter, Al Dhafra and Kalba went about the serious business of trying to save their place in the Pro League.

As the league entered its 16th round last night, the league's two smallest clubs found themselves in the relegation zone, on 12 and 11 points respectively, not without hope still of saving themselves but certainly hoping for three points against the unimpressive opposition they faced.

Dhafra and Kalba have earned their reputations as two of the yo-yo teams of the UAE. Dhafra have been up three times in the past decade. Kalba dropped out of the top flight in 2005, along with Dhafra, and did not climb back up until this season.

The fight at the bottom actually is a four-club struggle, with Al Ain (14 points) and Dubai (15) certainly not clear of danger, though it remains hard to imagine Al Ain, the nine-time champions, will not eventually climb to safety.

If the make up of the Pro League were left to marketing men, demographers and coach drivers, Dhafra and Kalba would be the teams to leave because they represent the two smallest and most distant cities in the competition.

Dhafra play their games in Hamdan bin Zayed Al Nahyan Stadium, which features only one stand of seats on the west side of a sunken pitch in this city of 30,000. The club's players live in Abu Dhabi, 150km away, and train there, venturing into the deeper desert only on match days.

Kalba, meanwhile, is even smaller than Madinat Zayed. An enclave of Sharjah emirate located on the east coast of the country, 100km from Dubai. And when Dhafra and Kalba play, one or the other takes on the longest road trip in the UAE, approximately 350km. One way.

The competitive issues with Dhafra and Kalba are obvious. Each has competent foreigners: the forwards Boris Kabi and Abass Lawal for Dhafra, and the forwards Gregory Dufrennes and Elias de Oliveira and the midfielder Simon Feinduono for Kalba.

Each club, however, is hamstrung by a lack of elite Emirati players. Neither side contributed a single player to the age-group UAE side that won a silver medal at the Asian Games in November or to the senior national side that reached the semi-finals of the Gulf Cup in December or to the Asian Cup squad in January.

Until those clubs, and Dubai may be added, as well, have their own top-tier Emiratis, they will continue to struggle against the country's best.

The foreigners decided the match last night. Dufrennes finished the two chances that came his way, and Kabi pulled Dhafra within a goal in the 78th minute. But that was how it finished.

Kalba are up to 14 points, and are in vastly better form; they have 10 points from four matches under the Brazilian Jorvan Vieira. In the same period, Dhafra have one point and have fallen to the bottom of the table, even with their own new coach, the Syrian Mohammed Kwid.

This may not be resolved until the final weekend of the season, when Kalba are home to Al Nasr and Dhafra are home to Al Wahda. Their supporters may want to make sure they see those matches; the Pro League may not be back for a while.

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What is the definition of an SME?

SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.

A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors.

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.”

Globalization and its Discontents Revisited
Joseph E. Stiglitz
W. W. Norton & Company