When Vladimir Putin arrives in the UAE on Tuesday, he will be among old friends.
This is no mere trade mission but also a chance for the Russian president to catch up with Sheikh Mohamed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces.
Leonid Slutsky, head of the Russian parliament committee on internal affairs, said Mr Putin considered Sheikh Mohamed as one of the key figures in the Arab world and a good friend.
Preparations for the visit are under way across the country with UAE and Russian flags lining Abu Dhabi's Corniche. It is also a big deal in Russia. Mr Slutsky said the Russian president had planned to visit the UAE many times since his first visit in 2007 but was always thwarted by an overloaded schedule.
“I’m surprised it hasn’t happened sooner,” Mr Slutsky told The National at the Duma headquarters in Moscow. “It has been planned and postponed many times. But the Russian president’s diary is overloaded.
“Vladimir Putin and Sheikh Mohamed bin Zayed talk all the time on the phone,” said Mr Slutsky.
The National was a part of a media delegation that visited Moscow last week to see first-hand how Russia views the UAE partnership.
The figures speak for themselves. Trade between the UAE and Russia reached Dh12.5bn in 2018, while about 3,000 Russian companies are registered in the UAE. This relationship is not a transactional one, however, and deep financial links mirror the personal relationship between both leaders.
Kirill Dmitriev, chief executive of the powerful Russian Direct Investment Fund, said the UAE helped the Russian economy recover following the 2014 global collapse in oil prices. Abu Dhabi’s Mubadala and the RDIF teamed up in 2013 to create a $7 billion (Dh25bn) fund with $2bn already invested. Both are now committed to 45 projects across Russia in projects such as healthcare, technology, oil, artificial intelligence, Mixed Martial Arts, airports, video streaming and online delivery platforms.
“Mubadala invested at a critical time for the Russian economy but they got very good returns,” said Mr Dmitriev. “We are very happy with our partnership.”
Expanding the fund will take centre stage during the visit of Mr Putin on Tuesday. During the trip, at least 15 deals in energy, nuclear power and the environment are expected to be signed. Russia and the UAE are expected to deepen ties across space, technology and defence, in particular.
If there is one area that underlines the huge extent of the UAE and Russia’s economic cooperation it lies in UFC’s mixed martial arts. The sport is hugely popular in Russia and Abu Dhabi’s staging of a UFC fight in September attracted thousands of people.
So it was no surprise that the UAE and Russia in 2018 set aside Dh3.67bn to boost UFC in Russia and former Soviet states through promoting merchandise, enhancing media rights and increasing sponsorship.
Tourism is also crucial. About a million Russians visit the UAE every year, buoyed by the introduction of visa-free travel earlier this year. And this is where MMA might also come in. September’s fight in Abu Dhabi between Russia’s Khabib Nurmagomedov and American Dustin Poirier did not go unnoticed in Moscow. “The event was a huge hit with Khabib’s Russian fans,” said Mr Dmitriev.
Both countries also share values in promoting tolerance, while eschewing extremism.
The UAE is home to people of many faiths with 2019 marked as the Year of Tolerance. In Moscow too, people of all religions are encouraged to visit the Cathedral Mosque. Mr Putin opened the renovated place of worship in 2015 and urged leaders to do more to prevent extremism.
“We see what’s happening in the Middle East where terrorists … discredit the great world religion, discredit Islam … Their ideology is built on lies,” he said.
Tuesday’s visit, then, is the culmination of decades of work by diplomats, businessmen and government officials set against the backdrop of the Cold War, twilight of the Communist state and emergence of a modern Russia allied with the UAE.
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
AUSTRALIA SQUAD v SOUTH AFRICA
Aaron Finch (capt), Shaun Marsh, Travis Head, Chris Lynn, Glenn Maxwell, D'Arcy Short, Marcus Stoinis, Alex Carey, Ashton Agar, Mitchell Starc, Josh Hazlewood, Pat Cummins, Nathan Coulter-Nile, Adam Zampa
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How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
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.”