UAE technology entrepreneurs have help close to hand

Tech entrepreneurs in the UAE have a growing number of sources they can turn to for financial and advisory support. These are some of their options:

Peer support

More incubators are rolling out in the Middle East and North Africa, modelled after programmes such as Y Combinator in the United States and VeloCity in Canada. Over time, some say, hubs like Dubai could become innovative centres much like certain cities in North America. “Being close to tech hubs can gain access to bright minds and [teachings] from people who have had similar experiences,” says Stephen Lake, the co-founder of Thalmic Labs, a Canadian-based tech company that cycled through both Y Combinator and VeloCity. TiE Dubai, meanwhile, is a membership group that focuses on networking, educating and mentoring among entrepreneurs in the UAE. “We do this through events and access to our network,” says P K Gulati, a TiE global trustee.

Internal contests

Some companies offer incentives to spur so-called intrapreneurship and internal innovation. L’Oréal, for example, has launched the Beauty Shaker Awards and other internal contests to find new business ideas from its employees. “Ten years ago, if you had a great idea and you wanted to start it on your own you had nowhere to go unless you quit your job or went to competitors,” says Sam Cheow,the vice president for start-up development at L’Oréal USA. “I think it’s incredibly clever to turn that opportunity into something else bigger for employees and the business itself.”

External competitions

Contests held by organisations such as the MIT Enterprise Forum and Global Innovation through Science and Technology offer much-needed funds, and they also open access to other support for early-stage entrepreneurs. “These kind of initiatives help entrepreneurs like me through providing a comprehensive network of innovative peers that allow us to see market problems and solutions from other perspectives,” says Mo Shahin, the co-founder and chief technology officer at AdvanTag. “It also provide us with great mentors and [an] advisory board.”

business@thenational.ae

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5.30pm: Maiden (PA) Dh80,000 1,600m

6pm: Arabian Triple Crown Round-2 Group 3 (PA) Dh300,000 2,200m

6.30pm: Liwa Oaisi Group 2 (PA) Dh300,000 1,400m

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7.30pm: Handicap (TB) Dh100,000 1,600m

The National selections: 5pm: Flit Al Maury, 5.30pm: Sadah, 6pm: RB Seqondtonone, 6.30pm: RB Money To Burn, 7pm: SS Jalmood, 7.30pm: Dalaalaat

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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Specs

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Points to remember

Debate the issue, don't attack the person
Build the relationship and dialogue by seeking to find common ground
Express passion for the issue but be aware of when you're losing control or when there's anger. If there is, pause and take some time out.
Listen actively without interrupting
Avoid assumptions, seek understanding, ask questions

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NBA-spec basketball court with auditorium
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Spaces for historical and cultural exploration
An elevated football field that doubles as a helipad
Specialist robotics and science laboratories
AR and VR-enabled learning centres
Disruption Lab and Research Centre for developing entrepreneurial skills

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