KUWAIT: Patrick Disney (right) with Jahangir Aka talking to the Kuwait Times.
KUWAIT: The financial world is immersed in uncertainty. In the Middle East, the turning points were revealed in two separate occasions—the 2009 exodus of investors from Dubai and the crisis in Bahrain two years ago. These two key episodes in the Gulf highlighted to regional investors that credit and political risks existed in the region, prompting the need for advice from organizations such as SEI’s for more prudent investments and asset management.
SEI Investments Company is a global provider of asset management, investment processing and investment operations solutions. Patrick Disney, SEI’s, Managing Director, Institutional Group, says, “The two main events helped us define the risk and benefits.” Disney was speaking with the Kuwait Times during a short visit to Kuwait to meet SEI clients. “The challenge in Dubai in 2009 reminds investors that there are risks in the Middle East.
The second was when the unrest in Bahrain occurred which reminds investors that there are political risks in the Gulf,” Disney asserted. But despite difficulties, the company remains resilient and committed to the region and in fact used the economic slow-down to their advantage. “We have to be very flexible about the way we position our solutions and the segments in which we work through the crisis. Our commitment to the region has been certainly unwavering and we continue to benefit from that,” he added.
Advice for growth
With the economic crisis and political situation (Arab Spring) currently still unfolding, Disney advised investors to remain firm and diversify their assets. “They come and ask for help so what do we do? We advise them to diversify their investments. Now families are diversifying their assets and investing them globally. That is the right thing to do,” he pointed out. “We have been talking to investors in the region on what to do; we offer investment strategy for institutions that are looking to invest outside the region and taking a global approach to investing and presenting our ideas on how we go about it which we believe is very distinct and unique way,” he added.
SWF cooperation
In the region, SEI, which was established in 1968, works with sovereign wealth funds, pension funds and family offices. “Each of those segments has slightly different implementation of global investment solutions. Our core capability is leveraging our global investment capability. For families we help them understand how much income they require to support their next generation and helping them invest in a prudent way to make sure they have enough income to support back. With Pension Funds, we help them understands what are their liabilities are and what their payments are, their welfare system, helping them match the interest rates, risk and help them deploy money to meet their objectives and demands,” Disney explained.
For the last 12 years, Disney has been heavily involved in representing the company in the United States and MENA markets. In the current environment, according to Disney, family offices are looking at the high returns and yields through their portfolio, which is almost similar to pension funds, that need to generate a certain amount of money because they have bills to pay. As a result, the key is yield enhancement and preservation “So we provide portfolio and solution approaches and give calculated risks to help them achieve their objectives,” he said.
Jahangir Aka, Senior Executive Officer – SEI’s Head Middle East, emphasized the importance of the Kuwait market in the Middle East. He said, “Kuwaitis have been investors globally for years and it’s been a good and sophisticated market for a long time. It is a well-developed market and we remain keen on opportunities here. Some of the younger markets in the region are focused on direct investing or private equity investing; as a result they are less attractive markets for us. For a more mature market like Kuwait they have a better appreciation of our capabilities and on what our approach is all about,” he added. Comparing Kuwait to Dubai market, according to Aka, Dubai is a more expat-focused market whereas Kuwait is more on local or domestic and institutional market. “The types of buying behavior are quite different,” he added.
According to him, Middle East or the GCC has a significant concentration of wealth as large families continue to dominate the business landscape. “In fact, there has been growth particularly in the numbers of the middle class in Dubai, Kuwait and Qatar. In Saudi we see an emergent middle class. The wealth concentration is something that actually even in the West becomes much more in the larger groups or larger families; that has always been the case in the Middle East anyway,” he said.
Asked on who is in the best position this time to come out first from the crisis, Disney noted that companies and countries which were most focused on leverage or debt have been the ones that have had most difficulty coming out of the crisis. “So when you look at the emerging market you see they were less (affected), the sounder and established economies were the ones that were giving problems (vulnerability) so the emerging markets had less leverage so they are in the better position to come out first.”
As of June 30, 2012, through its subsidiaries and partnerships, in which the company has a significant interest, SEI manages or administers $424 billion in mutual fund and pooled or separately managed assets, including $182 billion in assets under management and $242 billion in client assets under administration.
By Ben Garcia, Staff Writer
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