The global recovery continues across sectors after a year in which Covid-19 decimated oil markets and wreaked havoc on virtually all industries. Intrinsically linked to market trends, the wealth management sector did not escape the pandemic’s wrath, but recovery has begun.
Arabian Business sat down with Bernard Bonvin, a senior partner of the Probus Group, one of the group’s main shareholders and managing partner of the Dubai office since 2012, to talk about how the markets have fluctuated, what to expect going into 2022, and what risks investors should be aware of.
With eight offices around the world, Probus, a Swiss wealth management company, is merging with Pleion, which will put assets under the firm’s management at $4 billion.
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Can you talk about the trends you see in the GCC in the wealth management sector?
I think it’s impossible to disconnect the answer from the reality of what’s happening in the markets in general. As you know, we had a very dramatic phase during Covid-19. At the beginning of 2020 you had oil prices collapsing from 70 percent as lockdowns around the world went in effect, and the UAE residential market struggling with an enormous oversupply.
With the pandemic exacerbating the downtrend, it put immense pressure on the real estate market, and the travel bans also dramatically impacted the Gulf and the UAE in particular.
When you look at the numbers, 2020 GDP possibly went down around 6 percent and the stock market was not very good.
Then you had this change. The world adapted to Covid-19, realising it was not as dramatic, and started going back where we should be. There was a very strong rebound in the oil prices, Brent went from $50-$70 on the back of a supply crunch and reopening of the economy.
The property market is booming again, and tourism is recovering.
So when you put everything together, the question of growth in our industry – and especially in the region – is connected to these events, which have turned positive in 2021, showing very strong recovery across all industries
Looking into 2022, do you expect recovery to continue?
The market indicates we’re in a normalisation phase. It’s a phase in which there will be growth. It will not be enormous, but there will be growth. Things will continue returning to normal, but this expectation could be derailed by many factors.
We have increasing inflation possibly. We have possibly the resurgence of some strain of the virus, whether it’s omicron or another one that emerges.
Next year will be full of surprises, and we believe that it could be quite volatile to some extent.
What are things people should be on the lookout for moving into next year?
We could see three things. The first element is the possibility that inflation remains at a very high level. That would possibly trigger response from central banks, and that could derail growth. This scenario is the biggest fear, and it is impossible to know if it will materialise or not.
So we have to build portfolios taking into account several possibilities without knowing which will prevail.
On Covid-19, anything could happen. The virus is mutating, and we know that the vaccines and anti-viral drugs have prompted a pretty strong response. But we don’t know, a new variant could emerge that is super transmissible.
Then we have the surprises that could always happen on the geopolitical front, be it the relationship between China and the US, or Ukraine and Russia’s build-up of troops on the border. We could have surprises there also. We know the most likely situation with the normalisation would push short- and long-term rates higher and this will also have an effect of normalisation on the markets.
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