Lombard to manage $8bn of regional wealth

(SUPPLIED)   

Markets in the UAE and the region, powered by strong oil prices as well as liquidity, are among the fastest growing in the world, attracting wealth and asset management companies. And Dubai in particular offers a financial, legislative and service environment not available in other centres of the Gulf.

Pasha Bakhtiar, Managing Director of Lombard Odier Darier Hentsch & Cie in Dubai, tells Emirates Business about his work in the field of wealth management and the region’s booming personal fortunes.

Can you describe the size of the wealth your firm manages?

Worldwide we manage about $160 billion (Dh587bn) of individual or company wealth, and the Geneva-based bank seeks to upgrade the value of the region’s contribution to this wealth by some 0.5 per cent over the next three years to about $8bn. Saudi Arabia, the UAE and Kuwait top the list of wealth accumulation in the region.

Why have you not based your headquarters in Riyadh, for instance?

Simply speaking, Dubai is the most active business centre in the region at the moment, and it is working on a clear and promising strategy that indicates successive developments. Also Dubai’s leadership is committed to upgrading living conditions and to continue to lead in development.

This is in addition to the advanced legislative environment of Dubai. Take for instance the rate of growth in the number of companies registered with Dubai Financial Centre. People have chosen to come and invest here. Also the number of chances to create businesses and wealth in Dubai is still huge, and Dubai’s position between East and West helps in this.

Can you talk about the size of personal wealth in the region?

Unfortunately, no precise figures exist on the size of personal wealth available in the region or the UAE since 90 per cent of businesses in the region are family and private ones and there is no public information about them.

Also the border is often unclear between public and private wealth. There are several big companies in the UAE and the region that have a government structure but invest in private money. This is in addition to a low rate of transparency of disclosure compared with other regions of the world.

What segment of the market are you looking to capture or explore by opening offices in Dubai?

Our Dubai regional headquarters was set up in April 2007 to fill the gap in the wealth and asset management sector in the region. The growth in economies of countries of the region was difficult to ignore.
 
Also our company has been involved in wealth management in the region for 50 years and we have a wide network of relations with families.

We have wide experience in the transfer of wealth from one generation to another, and we have acquired this experience over 200 years. And do not forget that the rate of growth in the number of millionaires in the region is larger than that of Europe.

It has been almost a year since you moved into the Dubai market, how would you describe your work in the sector?

I would like to make it clear that while we have actually been in the region [with an office] for one year, we have been linked to the region for some 50 years, and the region itself has been linked to Geneva for a longer time.

We chose to be close to our areas of interest to be able to build work strategies that are in line with the changes happening in the markets. Results over one year have been beyond our expectation, and we are happy with this growth.

Are you depending more on transactions based on Islamic Shariah as part of changes in your strategy?

We seek to meet the needs of our customers as much as possible. And currently we are managing some wealth in accordance with the Islamic Shariah and will continue with this. But we do not offer a full spectrum of Shariah-compliant banking services.

You are sometimes called a special bank, and other times wealth and asset managers. Which do you prefer?

I personally prefer wealth management since it implies the potential to create new work ideas as well as the ability to look for and find new opportunities.

How do you market your services?

Our work mostly relies on relations with individuals and families in the region and the consequent understanding between the parties. Chemistry between us and the customer plays a big role in this respect.

What is your business philosophy?

t is based on diversification of risks according to the nature of the customer, his needs and what wealth represents for him as well as the nature of risks that he might deal with, whether he was a medium-risk person, etc. And then we decide the currency that he prefers to invest in.

Meanwhile, our researchers and analysts decide on the nature of investment opportunities around the world: their places, duration, currency and other changes.

And according to all the information and statistics we gather, our team decides the most suitable place for investment in a non-stop dynamic process.

What is the rate of investment return you get for your customers?

I cannot precisely disclose this, but we are talking about six to eight per cent of the volume of investment per year.

Dubai offers promising investment opportunities, especially in real estate. Do you invest in this sector?

I cannot tell you where we put our investments, as of now.

Pasha Bakhtiar

Managing Director, LODH, Dubai

Pasha Bakhtiar joined Lombard Odier Darier Hentsch & Cie in 2003 as part of the special affairs team. He formulated the bank’s business plan for its activities in the Middle East, which culminated in the opening of a representative office in Dubai in 2006. He was appointed its managing director.

Bakhtiar began his career as a financial analyst with the bank and focused specifically on Latin American markets. He spent some time in the “new economy” as head of business development at SourcingParts.com before taking a year off to pursue a Master’s in business administration from Insead. He also holds a BA in international relations from Georgetown University, United States.