At the end of another highly unusual year, we ask Arnaud Leclercq, partner Holding Privé and head of new markets at Lombard Odier, what he thinks of the rapid changes in the UAE and developments in wealth management.
Leclercq has managed the Middle East business of the Swiss private bank for the past 10 years. The bank itself has served clients in the region for more than 50 years.
Before talking about the long-term, let’s start with recent developments. How would you sum up 2021 in the UAE?
I think we have all seen a year of contrasts, with mixed phases of uncertainty and hope for recovery. But I am optimistic for the region and the latest economic forecasts point to positive trends.
The UAE’s economy is showing signs of recovery, thanks to the successful vaccination drive, resumption of travel, relaxation of lockdowns, and large-scale monetary and fiscal measures.
Vulnerability remains, but the long-term economic transformation will continue. Over the past decade, the authorities have intensified their efforts to diversify the economy away from hydrocarbons, successfully positioning the UAE as the region’s global trade, financial and travel hub. The non-hydrocarbon sector now accounts for two-thirds of GDP.
And how has business fared in the past few months? How do you see the future?
The Middle East is one of our fastest-growing and most strategically important regions. Assets from the UAE are growing at a double-digit rate. That’s why we opened a branch in Abu Dhabi in 2019, in order to serve our local clients better, with bespoke, onshore wealth solutions. In fact, we were the first Swiss private bank to set up offices in the prestigious Abu Dhabi Global Market (ADGM).
We are committed to building a strong footprint in the Middle East, and the UAE is one of its largest wealth markets. The Abu Dhabi branch follows on from our Dubai office, which opened in 2007. The newer branch therefore testifies to our faith in regional growth and economic stability, as well as our confidence in the Emirates’ future as a key business location and wealth generator.
You have been in charge of the Middle East at Lombard Odier for more than 10 years. How do you view the path that business there has taken?
I first came here amid all the hubbub and hype of 2006, and I must admit that during 2008–2009 we wondered if we should close the Dubai office down.
But we took the decision to strengthen it instead, because we have a long-term vision and we were deeply convinced of both the potential of the region and the value add that we could give to our clients locally.
The independent ownership of our group means we can invest for the long-term. We’re not driven by short-term profits. Instead, our timescales reflect those of our clients: wealth accretion over generations. More than 10 years on, our commitment has paid off, and we are now well established, with stable teams and dynamic client activities.
What contributed the most to your growth and success?
The experience, stability and security that we offer is rooted in Switzerland, where Lombard Odier was founded. But we have served clients in the Middle East for over half-a-century, so we have a deep understanding of their specific needs.
Our approach is bespoke, and we build our offering around our clients’ needs. That’s a key differentiating factor. For example, our discretionary Shariah mandate is not a one-size-fits-all fund like many others in the market, but a fully customisable solution. It allows
our clients to build their portfolio the way they want, drawing on the full capabilities of the bank.
You helped to create this dedicated Shariah offering almost 10 years ago at Lombard Odier. Tell us about the development.
That’s right. Since 2012, we have offered Islamic investment solutions, including our Shariah discretionary mandate, under the umbrella brand Lombard Odier Assayil. Lombard Odier continues to develop its Shariah mandates, together with the eminent Shariah board and scholars of Amanie Advisors, who certified us as Shariah-compliant in 2018.
We have received numerous awards for our Shariah expertise, like recently at the WealthBriefing MENA awards, or last year at the PWM/The Banker Awards. At the same time, we are ready to “rethink” our approach, we are open to new ideas and collaborations in the region.
Like your recent work with SEDCO Capital? How did this collaboration come about?
Lombard Odier has actually worked with SEDCO Capital for many years. In 2021, we decided to go a step further, as the investment solutions expertise of our two companies is aligned with the principles of both Islamic finance and sustainability. This led to a ground-breaking sustainable equity investment strategy, which is Shariah-compliant and in line with European UCITS standards.
How is investor demand for this kind of offering developing?
Shariah-compliant sustainable investing is still in its early stages in the region. But socially responsible, sustainable opportunities are a natural fit for the Arab world, where Islamic investments are already well established. Besides, there has been a change in investors’ mindsets. They now believe that sustainable investing will be crucial to unlock future returns.
Sustainability has also climbed to the top of policy agendas in the region. The UAE’s Vision 2021 aims to build up a sustainable infrastructure and environment. The core theme of Expo 2020 Dubai is sustainability, and Abu Dhabi Sustainability Week – where Lombard Odier senior managing partner Patrick Odier was a keynote speaker – is a globally renowned event.
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