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29 March 2024

Private banking now focusing on wealth preservation

(EB FILE)

Published
By Karen Remo-Listana

Earlier this year Bank Sarasin-Alpen (ME) launched a $100 million (Dh367m) GCC Equity Opportunities Fund to invest in the region's stock markets. The asset management company is planning to launch a similar fund focusing on the Mena region before the end of the year.

The company is busy looking for investment and expansion opportunities and is keen to acquire more human capital. "I am very bullish because there is plenty of business still to be done," said Rohit Walia, Executive Vice-Chairman and CEO, Bank Sarasin-Alpen (ME) and Alpen Capital (ME). "That is why we have launched a fund that nobody else has launched. That's why we are still hiring people – they are better assets to acquire than balance sheets."


You recently launched the Sarasin GCC Equity Opportunities Fund, which is expected to deliver compound growth of more than 25 per cent per annum over more than seven years. Have you reached the $100m target and have you invested the funds already?


The fund is doing well, not as we thought it would but it's doing surprisingly well. It is very different from anything else that is in the market. It doesn't buy individual stocks, it buys a market. You really cannot go wrong. We're picking up a good amount of money – not the $100m target yet but we are getting there.

And you'll also be launching a Mena equities opportunities fund?

Not yet, but we are working on it. The world is in a different shape now but we will launch it, it's on the cards. We will take a decision very soon, during this year.

Is this a good time to buy?

It is a phenomenal time to buy.

Has liquidity come back to the market?

We have been closing a couple of transactions on the investment side of the business. The liquidity is a little bit expensive but it is there. Not all banks are illiquid, some are very liquid. Bank Sarasin is very liquid.

But has the trust come back? Some analysts say that though there may be some liquidity there is nevertheless no trust in the system…

That is a very generalised comment. I hear that all the time but I actually do not understand what people are saying. The money is still in the banks, you haven't taken it out and put it under your pillow, so there is obviously trust in the system. The status quo is that people are unsure about what to do at the moment because the markets are very volatile.

Most investors are in a conservative and consolidating mood. Are you on the same path?

Our plan this year is to grow our core business – investment and private banking. There is plenty of business to be done. We are very busy. We will hire some more people, we have already hired a number of people and it's time to get great and quality people. We have no acquisitions but we will acquire people, they are better assets to acquire than balance sheets.

What opportunities are you looking at with these two businesses?

On the private banking side it's more about wealth preservation. The opportunity is to take the money and keep it safe for you. That's a huge opportunity which people had not really been looking at in the past three to four years – they were much more into doubling their money. On the investment banking side there are a lot of opportunities in mergers and acquisitions.

Are you handling sovereign wealth funds' (SWFs) money as well?

We handle some of their money.

How do SWFs differ from family offices, individual and institutional investors?

They tend to make their own decisions, they are very savvy investors. They have a team of people who understand what they are doing and use banks to execute and make the actions, but not to make decisions for them.

So SWFs use private banks merely to execute their decisions?

No, that's not what they use private banks like us for. They use our mother company to host the money, to keep the money somewhere safe till they invest it. I don't think they are very active these days, I don't think it's a time for activity, I think it's a time to consolidate. But we are not consolidating, we are active.

Most of your clients are GCC investors. How do they differ from investors in the West?

The major difference is that investors from the GCC have a higher appetite for leverage, which helps to increase their returns and the yield on a specific product, which doesn't happen that much in Europe. As long as you leverage conservatively then there is no problem. Over-leveraging is where the trouble starts.

Reports say Dubai has over-leveraged. You've been here for 17 years so perhaps you can gauge the real situation.

No, it's a perception. It's a perception by people who are probably leveraged themselves and like to put other people in the same pocket. I have seen it all from scratch and this whole perception of a balloon economy… Look, I am sitting at the DIFC and there is no more space here. I am looking for more space, am having a big argument with the administration to get more space, but I can't. Is that a balloon? Probably not.

PROFILE: Rohit Walia Eecutive Vice-Chairman and CEO, Bank Sarasin-Alpen (ME) and Alpen Capital (ME)

Rohit Walia set up Bank Sarasin-Alpen and Alpen Capital in 2005 at the Dubai International Financial Centre. He is Executive Vice-Chairman and CEO of both organisations. He has more than 25 years' experience in international banking and previously worked for Mashreqbank PSC-Dubai, Bank of America and American Express Bank India.

In his last assignment at Mashreqbank, where he spent 11 years, Walia was Divisional Manager of the Commercial Banking Group where he was responsible for formulating and executing aggressive business plans.

He holds an MBA from the Schiller International University, London.

 

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