In the Middle East it is often the case where investment is sought from close friends and family, randomly knocking on people’s doors or a “boy have I got the guy for you” lead from someone you may or, may not, know. In some scenarios investors will spend three to six months finding creative ways to buy time and in the end say no, wasting time that you could have spent pursuing more productive leads.

The truth is, on average, 60% of investors reject projects in the first 30 minutes. This could be caused by anything from a weird handshake to a voice with no confidence, how you smile, to how quickly you can bore them, it sometimes even depends on external factors out of your control. A further 25% are rejected within the first three hours, 10% after a full day, 3% as a result of negotiation, and at best only 2% raise finance, which means you need to be speak to 50 investors to find one solid one (on average). More importantly, it means that only one in 50 companies is good enough to be invested in.

If, however, you know exactly what you are doing and receive the right support, it can be a rather positive experience. However, even with prior experience, the process can be both daunting and disconcerting.

Crucial factors

The question I am most asked always boils down to the same thing: “What’s the most important factor when raising capital?”  I cannot stress the answer enough; the management team. Whether it is just one, two, or ten people, a fantastic team with a bad product still has a chance of creating a successful company; a horrible team with an “amazing new ground breaking product” will definitely fail within six to twelve months.

Finding the management team

Start with friends and family; look for the skill sets you need but don’t bring family in just because they are relatives. After that, go out there and look for them. Conferences, events, networking groups and begin good old fashioned conversations with people. Another way is to seek professional help in placement.

Necessary management qualities

- Drive: Young companies usually depend on the drive of the head person, thus no drive, no success. Investors can see that from the outset and will drop the project fast if there is no passion.

- Experience: In raising finance, in running companies and in the business world in general, it is good to have technology and industry specialists in the team, as it gives confidence to the project, but the company must be spearheaded by someone with business acumen.

- Flexibility: A management team’s inability to be flexible and find solutions is one of the core aspects that determine the success of a company. This can be seen in anything from negotiating shareholding to plans moving forward. If someone is unwilling to change, their company will never be able to change with market demand and will be swept aside by the tide. Be humble and quick to learn.

- Good presentation skills: This is a must and can be taught by professionals.

- Don’t fall in love with the asset: Despite having spent five years researching the product, hearing amazing feedback from everyone and knowing you’ve hit a gem, do not fall in love with your assets. At the end of the day, it is a product, and no product is perfect, therefore you need to focus on developing, improving, changing and updating all the time.

- Trust:  Last but not least.  Be open and honest, be yourself and don’t shift or try to conceal facts; investors can see them all and remember they do this for a living.

The next step

Firstly, you will need a business plan (though generally investors will only read three to four pages, they need to know that you know what you’re talking about and have structure and direction).

Secondly, something that is under-valued but highly valuable is a board of advisors or directors; this proves that you are not claiming to know everything and can lean on the shoulders of those larger than you. Finally, add detailed explainable financials to the mix and a good pitch and you are ready to go.

Investors can be your best friend, ally, confidant and, in most cases, the key success factor to your business. Envestors MENA deal with everything from advisory, business plan, presentation, placement, legal, valuation, financials and so on and also deal with both investors and entrepreneurs on a daily basis.  A “Dragon’s Den” style show is conducted every few months, where the entrepreneur pitches to around 80 credible investors (and even more in the broader network).

When seeking financial investment the first start should always be close friends and family.  If you can’t convince them, you won’t be able to convince investors. It is very difficult in general, but don’t despair. Let people within your wider circle know of your plan and need for raising finance as opportunities can arise that way.

Speak to people who have previously financed small companies in the region and try to set up meetings with them, taking literally only ten minutes of their time – anymore and you run the risk of boring the investor. Remember to always do your due diligence on the investor in advance if you do not know them.

Has investment lost traction with the economic downturn?

Though investors are putting a lot less cash in than they did pre-crisis, they are still actively seeking SME’s to invest in, as it is a healthy substitute to other available alternative investments such as derivatives, government bonds and so on.

They like tangible businesses, ones they can touch, feel and kick the tires on. There is an appeal to helping something that benefits the greater community we live in and it is especially good if it is an add-on to their already existing businesses in some shape or form.

What do investors like to see?

- Good management team: This can never be overstressed!

- Credible financial projections: If you presume you will be making net profit of AED 50,000  in the first year and a net profit of AED 50 million in the second, investors won’t even give the rest of the plan a second glance; you are clearly not reasonable and this can be immediately off-putting.

- Adequate financial returns: If a business will not make an investor’s money back within a couple of years, then they are unlikely to invest.

- Scalable:  Don’t bother starting a business that does not have a market you can sell to. It needs to be scalable, in terms of market and geography. A product that only caters in one country is not likely to receive investment; there must be a growth plan.

- Clear exit route: Investors want to see that this isn’t a lifestyle business for you, that you intend to make money and have a more valuable asset to sell onto the next individual or company; in every business plan should be a clear and definable exit strategy.

Yousef Hamza

To sum up

As we all know, raising finance for your business is probably one of the most important factors for its success. You need money to make money. Despite this, entrepreneurs spend months and years on business planning, customisation, marketing, and just about every other aspect of a business, but do not spend enough time learning about the correct angles for raising finance. Even people who have been raising finance for years find it extremely difficult as they have never truly sat on both sides of the table.

Be realistic, be humble, be reasonable and remember if you’ve thought of the idea chances are somebody somewhere else has too. This isn’t a bad thing; competition is healthy, but just ensure you’re there faster, are more flexible to change and development and have a better management team to execute the project.

About

Yousef Hamza is an associate with Envestors MENA, a company which has advised over 1,000 entrepreneurs on everything from business plans, company strategy, valuation, placement, legal advice, presentation skills and local aspects.

Envestors is a regional Business Angel Network which has taken on, advised and raised finance for nine startup/growth companies for just over USD 12 million, with a further USD six million offered to four additional companies in the last six months alone. They have also actively advised on larger M&A deals, including the raising of finance for projects totalling over USD 150 million.

The awards ceremony held in Dubai honoured all parties involved in the deals at a prestigious black tie event held at Dusit Thani Hotel. Several firm partners were present at the event and collected the awards on behalf of the firm.

The Awards are chosen from a pool of globally nominated deals and are presented to leading firms in their chosen categories and markets.  The judges looked for evidence of legal expertise, innovation and strategic vision in the deals that were nominated.

Partner and Head of the Jordan and Iraq offices, Mr.Khaled Saqqaf commented on the award, noting that “We are truly honoured at receiving such a prestigious recognition of our efforts both locally and regionally.  Advising on the first ever Sukuk in Jordan is an exciting challenge and one which we feel will help shape the future of Jordan’s approach to the financing of future projects.  Receiving such a global award from IFN for our work demonstrates the significance of this accomplishment.”

Partner and Head of the Kuwait office, Alex Saleh further added, “we are extremely pleased to receive such notable recognition and accolades.  Our teams locally and within the region continue to strive towards excellence and innovation.   We want to thank everyone involved on the deals for their dedication and efforts, as well as IFN for recognising our firm for our outstanding work in Islamic Finance, it is truly an honour.”

The deals chosen were; Al Rajhi Cement Sukuk al Ijarah, Sukuk Deal of the Year; and First Investment Company Sukuk Wakalah, Kuwait Deal of the Year.  Both deals were notable “firsts” in Islamic Finance. The Al Rajhi Cement Sukuk was the first Sukuk issue in the Kingdom of Jordan.  Additionally, the First Investment Company Sukuk Wakalah was the first transaction whereby bi-lateral debt was restructured into a Sukuk.

The First Investment Company (FIC) Sukuk consisted of numerous unsecured bilateral Islamic financing facilities to multiple creditors in Kuwait.  The bilateral agreements were replaced through the creditor’s subscription into the Sukuk Al Wakala.

From left to right: Dr. Nasser Saidi, Chief Economist, DIFC, Mohsen Ahmad, Director of Operation Development and Stakeholders Relations,Dubai World Central, Mohammed Al Muallem, Senior Vice President and Managing Director, DP World, UAE Region

Dubai International Financial Centre (DIFC), the financial and business hub connecting the region’s emerging markets with the developed markets of Europe, Asia and the Americas, hosted “Integrating MENA into Emerging Global Supply Chains: Building on Dubai’s Infrastructure and Logistics” supported by Dubai World Central, as part of the annual DIFC Economics Workshops series.

The workshop addressed various facets of the topic including Dubai as a logistics hub, innovative project financing options, key elements to facilitate regional integration, and infrastructure and reconstruction opportunities in the MENA region. The event also provided a platform for financiers and business leaders to network, share knowledge and discuss the latest trends and developments in infrastructure and logistics in Dubai and the region.

“Dubai’s investments in infrastructure and logistics have enabled it to diversify, achieve greater openness and transform its economy, changing its position in global economic geography, said Dr. Nasser Saidi, Chief Economist at DIFC.  ”But infrastructure investment requirements are growing as a result of the Arab Spring. We will need to focus on new approaches to infrastructure and logistics investments through greater private sector participation, financing through local currency debt and Sukuk issues, as well as new region-wide institutions.” Dr. Saidi also stressed the need for the creation of  an Arab Bank for reconstruction and development.

The event opened with a session titled Dubai – The Region’s Trade, Business & Logistics Hub, which discussed how Dubai’s investments in infrastructure and logistics have transformed it into the region’s trade, tourism and business hub, allowing MENA to integrate into emerging global supply chains.

Participating in this session, Mohsen Ahmad, Director of Operation Development and Stakeholders Relations at Dubai World Central spoke about the current and future projects led by them, including latest developments to maintain Dubai’s status as a logistics hub. He also shared trends in trade and airport traffic with the audience, highlighting Dubai’s interconnectedness. The launch of the DWC’s Al Maktoum Airport was also among the points of discussion, with its benefits, including increased connectivity, outlined.

“Dubai World Central is positioned to cement Dubai’s leading position as a hub for trade and commerce. More than ever, speed and connectivity are increasingly becoming must-haves for global organizations. With the currently operational Al Maktoum International Airport at the heart and integrated logistics and aviation districts, DWC is the ideal platform for business looking to expand their reach into the dynamic MENASA region,” said Ahmad.

The session also discussed areas that require improvement, touching upon existing inefficiencies and steps to overcome them. Mohammed Al Muallem, Senior Vice President and Managing Director, DP World, UAE Region, highlighted the role of DP World in developing and maintaining Dubai’s status as a logistics hub. He also spoke about current and future projects of DP World, including latest developments, also highlighting the shift in focus to emerging market economies.

“DP World is at the frontline of connecting Dubai, the UAE and the region to the rest of the world with our flagship Jebel Ali Port serving as the largest and busiest logistics hub between Europe and Asia. Emerging markets account for more than 75% of our business and are the focus of our growth strategy. Our recent decision to increase the container handling capacity at Jebel Ali by 5 million TEU (twenty-foot equivalent container units) is in line with the growing trade flow between this region and the developing economies,” said Al Muallem.

The changes in financing options for the MENA region’s businesses was among the points of discussion, with the sectors of focus highlighted. In addition, the session identified the changing trends in the post- financial crisis world, and the changes post Eurozone sovereign debt crisis. The speakers also touched upon the role of Islamic finance as an additional source of financing, including current growth and its ability to provide access to untapped funds. An overview of the potential benefits of regional infrastructure integration, alternative sources of project finance, and innovative instruments used in other regions and their suitability for the MENA region were also points identified in the session.

Speakers also discussed the issues involved in financing, from a financial institution’s perspective, and the main challenges faced when financing infrastructure projects in the region. The discussion also aimed to identify how an integrated MENA region can play a central role in the larger global network, and the possible avenues for integration with emerging markets such as China and India.

This session was followed by another one titled Infrastructure: Expanding horizons through Regional Integration.This topic focused on the regional economic integration and how it can benefit from integrated infrastructure. Similarly, integrated infrastructure projects can enable and drive regional economic integration.

The workshop concluded with one final panel discussion titled MENA Infrastructure – Opportunities for Reconstruction & Role of Emerging Market Economies. It mainly focused on the fact that the Arab Spring and reconstruction requirements present a major opportunity for massive infrastructure investments that would foster economic growth and integration of Arab countries into new, emerging global supply chains.

From left to right: Rashed Ali Al Ansari, General Manager of Al Ansari Exchange, and Chandra Prasad Dhakal, Executive Chairman of International Money Express

Al Ansari Exchange, the UAE’s largest exchange house network that provides worldwide remittance and foreign exchange services, has announced that it has recently signed an agreement with International Money Express (IME), Nepal’s leading money transfer company, offering remittance services to Nepal through “Cash Express” service. Al Ansari Exchange will facilitate remittance transactions through any of its more than 110 branches across UAE, while recipients can receive the amount through more than 1,800 outlets of IME in Nepal.

 From Right to Left: Amjad Naser, Group Sharia Head, Noor Islamic Bank, H.E. Khalid Rashed Al Thani, Deputy Secretary General, AMAF, H.E. Tayeb Abdulrahman Al Rais, Secretary General, AMAF, Ahmad Abu Shehab, Head of Organising Committee, Dubai International Conference for Awqaf 2012, Mohammed Khalifa Al Abbar, Manager of Government Relations, Emirates Islamic Bank, Abdul-Razzaq Al-Abdullah, Chief Executive Officer, Dubai Islamic Bank

Awqaf and Minors Affairs Foundation (AMAF), mandated to grow waqf (religious endowment under Islamic law) and qualify minors, today announced the third edition of the Dubai International Conference for Awqaf will be hosted under the patronage of H.H. Sheikh Hamdan Bin Mohammed Bin Rashid Al-Maktoum, Crown Prince of Dubai and Chairman of the Executive Council for Dubai.

To be held from the 22nd-23rd of April, the conference will highlight best endowment practices and successful institutional experiences. It will also serve as a platform for creating comprehensive guidelines to enhance the performance of endowment organisations.

The event will deliberate on endowment funds, avenues of endowments, terms and conditions, as well asstandards of payment to endowment beneficiaries. Featuring six sessions that will examine 21 papers on topical subjects from the endowment landscape, the discussions will additionally track the endowment growth experiences of Turkey, Malaysia, New Zealand and Denmark.

The Dubai International Conference for Awqaf 2012 is set to draw the participation of endowment organisations, experts and scholars in the fields of religion, economics, law, finance, Islamic investments and representatives of universities from more than 20 countries worldwide.

The announcements were made at a media briefing that was headlined by the Secretary General of AMAF, His Excellency Tayeb Al-Rais, and other senior representatives from AMAF.

Addressing the press conference, His Excellency Al-Raissaid: “We aim to position AMAF as a global role model in growing waqf and ensuring the empowerment of minors. Towards this end, AMAF continuously aims to understand endowment best practices, highlight historic endowment methods and study current global experiences in growing the endowment landscape. We will continue to enhance and develop our services based on these insights to better meet the expectation of communities and those in need of endowment funds.”

Dubai International Conference for Awqaf 2012 aims to identify the Sharia, legal and customary vision of the concept of endowment funds and best ways to identify beneficiaries. It will additionally highlight strategies, plans, processes and procedures approved by modern endowment institutions in the area of payment to endowment recipients.

His Excellency Al-Rais added:“Contemporary endowment institutions face the challenge of identifying payment mechanisms and conforming to statutory requirements for facilitating payment to the needy or endowment beneficiaries. Through this conference, we aim to ascertain solutions to overcome such challenges and enhance the performance of waqf organisations in the UAE and worldwide.”

The Dubai International Conference for Awqaf 2012 will look to raise awareness on the culture of charitable endowment and its relevance to nations and people. Furthermore, it will seek to enhance cooperation, communication, exchange of experiences and partnership among endowment institutions. Through fostering information exchange, the conference will strive to encourage endowment officials to be creative and innovative in their approach to serving the society.

Noor Islamic Bank and Emirates Islamic Bank are the platinum sponsors of Dubai International Conference for Awqaf 2012, while Dubai Islamic Bank will participate as the gold sponsor.

“Dubai being a hub, various categories of businesses choose to set up in the Emirate for faster growth and market access. The 120 days licence is part of DED’s efforts to enable businesses to make full use of the advantages of Dubai and improve the Emirate’s ranking in the Doing Business Report of the World Bank,” said Mohammed Shael, Chief Executive Officer of the Business Registration and Licencing (BRL) Division at DED.

The new initiative will allow investors to have their licences issued immediately from DED depending on the risk factors of the intended business activity.  Business activities in Dubai have been categorised as No-risk, Low-risk and High-risk for the sake of evaluating the risk component.

“The categorisation depends on four main risk factors, evaluated on the basis of whether the business activity is harmful to human beings, harmful to animal life, harmful to plants, or harmful to the environment. When a businessman approaches DED for a licence, a 120 days licence is issued immediately, on completion of the necessary procedures, if the specific business activity falls under the No-risk or Low-risk categories,” explained Shael.

The 120 days licence allows the entrepreneur to start his business immediately and complete the rest of the licencing requirements, such as approvals from other government authorities concerned within the next 120 days. Government authorities are entitled to ensure full compliance of the licence holder to the licence criteria on day 121.

More than 90% of businesses in Dubai are No-Risk or Low-Risk and therefore a vast majority of businesses stand to benefit from the 120 days licence. For High-risk business activities constituting the remaining 10%, e.g. restaurants and clinics,  all standards set by the government authorities concerned have to be fully met before DED issues the licence.

The Low-risk category includes chemical plants and similar industrial operations that require pre-approvals from various authorities including Dubai Municipality and Civil Defence. “These facilities have stringent standards often embedded in their design and they go through years of preparation and inspections. Hence, there is no risk in issuing them a licence. It will in fact allow them to complete procedures like testing and hiring before starting actual operations,” Shael said.

Referring to the 120 day hassle free licence as a new philosophy of business registration and licencing, Shael said the initiative along with significant reforms like the Law No.13 of 2011 will dramatically enhance ease of doing business in Dubai.

The Law No. 13 issued by H.H. Sheikh Mohammed Bin Rashid Al Maktoum in 2011 acknowledges the contributions of the Free Zone companies to Dubai’s economy and allows such companies to open branches in Dubai while maintaining their presence in the Free Zone. A Free Zone company can operate a branch in Dubai as long as it is active within the Free Zone but any termination of Free Zone activity will reflect in the Dubai licence as well.

The Law No. 13 also allows Free Zone companies that have no local partners to open branches in Dubai, provided such branch has a Local Service Agent on board. A Local Service Agent is a UAE national or UAE company who will sponsor employees for the Dubai branch of a Free Zone company at the Ministry of Labour. The Local Service agent will have no rights of voting or decision-making in the company.

Shael stated that non-UAE nationals are already allowed to hold 100% ownership in Dubai companies even without a Free Zone licence. Professionals such as doctors, technicians, carpenters, cooks etc can have 100% ownership unless the entity is a Limited Liability Company (LLC). Expatriates can only have 49% ownership in LLCs with UAE nationals holding 51%.

The Palestine Growth Capital Fund (“the Fund”) is part of Abraaj Capital’s USD 650 million SMC investment platform, Riyada Enterprise Development (RED). The Fund will target investments in 13 to 15 businesses, which are expected to achieve growth and have the potential to expand into new regional and international markets. This will enable Palestinian SMCs across all sectors to strengthen their ongoing development, resulting in substantial job creation, innovation and long-term economic growth in Palestine.

The Fund was able to achieve a strong first closure of USD 36 million with active support from Fund partners such as PIF (Co-sponsor of the Fund in Palestine), BoP, Cisco, EIB, and Abraaj Capital, who constitute the anchor investors in the Fund, in addition to several other individual partners both in the region and the United States.

The Fund announced its first strategic investment in a Palestinian SMC: Thimar Agricultural Investment Company, a leading fresh herb and produce exporter in Al Oja, in the Jordan Valley. The company was chosen for its growth potential, innovation and strong management team. Thimar will now leverage the regional network of Abraaj Capital, who will support the ongoing growth and development plans of the firm.

The RED platform operates at a regional and country-specific level with investment teams in eight MENA countries, providing economies of scale and the ability to facilitate geographic expansion of its partner companies.

Speaking at the event Dr. Mohamad Mustafa, President, Palestine Investment Fund, said: “We at PIF view the partnership with Abraaj Capital in the Palestine Growth Capital Fund as fundamental to our commitment to promoting SMC investments in Palestine. PIF has been supporting this sector through a multi-tier approach, from credit facilitation to loan guarantees. However, we feel that the private equity model introduced by RED Palestine and the regional and global network of Abraaj Capital offers tremendous growth potential for our SMCs.”

Claudio Cortese, Deputy Director General of Operations Outside of the EU at the European Investment Bank, said: “In line with FEMIP’s priorities, EIB’s investment in the Palestine Growth Capital Fund demonstrates the bank’s continued support for SMEs in Palestine, a key sector for growth generation and a cornerstone for sustainable employment generation. We are delighted to continue our partnership with Abraaj Capital inPalestineand other markets in order to help provide the finance and hands-on expertise that these companies need to grow.”

Tom Speechley, Senior Partner, Abraaj Capital said: “We are delighted to announce the first close of the Palestine Growth Capital Fund, which will nurture small and  mid-cap companies in Palestine by providing growth capital and expertise, which are critical for them to compete on a regional and international level. We are equally happy to be here in Ramallah with our Fund Co-sponsor PIF and all our Fund partners from Palestine and overseas. This has been a great synergy of vision, energy and foresight, and this partnership will further integrate Palestine into the regional private equity market through a range of benefits that can be reaped from our global SMC platform.”

The global platform for  SMC investments has rapidly grown within Abraaj Capital and its RED platform. Abraaj Capital recently announced the acquisition of Aureos Capital which, pending certain approvals, would create a truly global emerging markets private equity firm with USD 7.5 billion in assets under management, a presence in 30 countries across Asia, Africa, Middle East and Latin America and 153 investments managed by a seasoned team of over 150 investment professionals.

Some businesses in the UAE hold a significant amount in cash. This can be for good reason; it allows management to react quickly to take advantage of opportunities as they arise and it can provide a buffer in the event of a downturn which, in a still developing economy such as the UAE, can be invaluable. After all, it is a well known fact that many businesses fail, not due to unprofitability, but due to having insufficient free cash with which to pay their immediate creditors.

Another factor with companies in the UAE holding cash is the unknown expense of gratuity payments. Depending on the size of the workforce and their average length of service, a business’ potential liability can be significant. There are companies that make absolutely no provision for their gratuity liability, which really is a huge risk, while others hoard cash, which carries a massive opportunity cost and leaves the business, open to other risks.

Sitting on cash can be an expensive luxury because it has an opportunity cost. Without going into too much detail, cash sat in a bank account earning interest, could, and maybe should, be being put to use elsewhere.

Even worse, a cash-rich company runs the risk of being careless. The company may fall prey to sloppy habits, including inadequate control of spending and an unwillingness to prune growing expenses.

But regardless of whether a business is holding the “right” amount of cash, which in itself is clearly a matter of opinion, they all have to hold some cash and this article concerns itself with what is an alternative for it.

Risks with holding cash

There is a risk associated with holding cash:

- The risk of not earning a much better rate of return by being put to a more productive use (the opportunity cost)

To combat the opportunity cost, if a business is going to hold cash, and not just for the short term (as a longer term hedge against unknown liabilities in the form of market downturns and gratuity payments) they need to be certain that they are getting the best rate of return on it.

Offshore investment bonds

One answer to both of these concerns is to invest corporate cash in an insurance bond with a major offshore life company. You may already be familiar with these sorts of wrappers from a personal investment perspective (they are very popular with expats and for good reason) but very few people are aware that they can be used to house corporate cash at very low cost.

Here are a few of the advantages of using an offshore investment bond wrapper to hold your business’ excess cash (cash over and above what you need to keep liquid for day-to-day cash flow management):

1. You can access high rates of return on cash that you might not be able to get through other conventional channels.

Offshore investment bonds provide access to multiple bank accounts from many different banks internationally. They offer deposits on an instant access basis or term deposits with terms from three months up to five years, with competitive rates offered for those who are willing to tie their capital up for longer periods.

2.      You can easily switch your company’s cash between banks to get the best rates available.

If you are with one particular bank and you see another offering a better rate for corporate cash do you transfer your cash from once bank to the other? Probably not! The paperwork and hassle involved with opening a new bank account is rarely justified.

By using an offshore investment bond to house your company cash, you can withdraw from one account with one bank and put it with another bank offering a better rate with minimum hassle; no money laundering checks, no forms and none of the usual procedures that make it so difficult.

3.      You can ensure your surplus cash is invested with only the most secure institutions.

Not all banks are born equal and there are some that are much more deserving of our faith. Is your surplus cash held with your day-to-day bank? If you choose to stick your surplus in an offshore bond, firstly be aware that the majority of the banks available within the bonds scheme have had to go through a stringent due diligence process (although this is my no means infallible) and if you have any doubts, you can easily move from one bank to another.

4.      You can invest your cash in assets other than bank accounts to access even higher returns.

And finally, you always have the option of investing in something other than cash to try and earn a better rate of return. You need to be careful with this as anything other than cash will fluctuate in value and can (and probably will) fall in value at times and in some cases the rules stating what your company can invest in may prohibit such investments. But by widening your horizons it may be possible to significantly reduce that opportunity cost by earning a better rate of return on relatively low risk investment such as fixed interest investments.

It is also possible to split your cash between what you really need to keep available at a moment’s notice and what you can afford to take a slightly longer term view. For example, companies holding a significant amount of cash as a precaution against unknown gratuity liabilities can afford to take such a view and may find that they can get their cash working a lot harder for them.

The bottom line

Regardless of how much surplus cash you may have at your disposal there are more options than just leaving it with the bank with whom you do your day-to-day banking – and there are some very good reasons as to why you should consider not leaving it there. An offshore investment bond can provide options and security as well as the opportunity to make your idle cash work a bit harder.

About

Rupert Connor and Richard Taylor are independent financial advisors with Acuma Wealth Management. As qualified advisors in the region they help expats to get their finances in order, and maximise the financial opportunities available offshore and plan for future events.

Acuma Wealth Management offers three core services; wealth creation, wealth management and wealth preservation, which include retirement planning, pension transfers (SIPPS & QROPS), death tax and inheritance planning, life assurance and critical illness cover, group pensions and corporate benefit solutions, key man insurance and shareholder protection, and medical insurance.

The round table session, facilitated by ACCA, the global body for professional accountants, highlighted that although anecdotal evidence points towards women outperforming their male counterparts at graduate and qualification levels, lifestyle expectations and family commitments often result in a withdrawal from the workforce rather than progressing higher up the corporate ladder.

Helen Brand, Global CEO, ACCA, said during the working group session:

“In the UAE we have a significant talent pool to draw upon, the issue we face, however, is that a large percentage of this talent is not participating in the workforce at a leadership level. 20% of ACCA qualified senior financial professionals are women. Lifestyle pressures and family responsibilities often mean that the glass ceiling tends to kick in at the middle to senior management level.

“At the heart of the debate is the need to recognise the value of the profession, and those individuals who have worked hard to earn their qualifications. Qualified is a term often used alongside academic achievement, and while this has merit, it is important that we raise awareness of what it means to be a qualified professional in order to ensure that employers value that skill set, and the ethical codes that the individual has signed up for.”

Citing the need for flexible working arrangements which allow women to remain working following childbirth, Ginnie Carlier, Partner at Ernst & Young, one of the largest professional services firms in the world, commented:

“At Ernst & Young we have taken an active approach to supporting diversity and inclusion within our teams in the region. By developing and improving our maternity leave policy and flexible working arrangements, we have been able to retain talent, such people who might have opted out of the workforce to raise their families. However in order to ensure that firms are acting in tune with the needs of all team members and in the spirit of inclusion, it is important that flexible work schemes are open to male as well as female workers. We are proud of the work we have done to date, but recognise that this is an evolving process that we are continuously working on.”

However, it is not just the need for gender diversification that is driving discussions in the financial sector in the UAE and other GCC markets. ACCA currently has 157 UAE nationals as students studying for their qualifications within the UAE and abroad, and is actively working with a number of local organisations to highlight the opportunities for UAE nationals in the accounting and finance sectors, and ensure that the industry is seen as a viable long term career option.

Suzy Baxter, Head of UAE, ACCA, commented on the issue of encouraging local talent into the profession:

“Being ACCA qualified means that members have an effective passport to work in the profession in any market across the globe. As issues such as Emiratisation become more prominent, the accounting and finance profession should be viewed as a viable career path for any Emirati seeking to work at the cutting edge of business, be it international, regional or domestic.”

On the issue of nationalisation in other GCC markets, Fatma Al-Kharusi, the first Omani woman to qualify ACCA and Finance Director of Petroleum Development Oman, the Sultanate’s foremost exploration and production company, concluded:

“Experience shows that where there is a push from the top management on nationalization, then it works. And as more qualified nationals take over senior jobs, the effect is multiplied. As for women, demonstrated ability goes a long way in acceptability. To give the example of our company, our workforce is now 80% Omani, and a third of the top management is women.”

Burelli, considered a global expert on cards, payments and transaction technologies, is slated to present an exclusive research on mobile money at the upcoming Prepaid Summit 2012.

He observed that strong year-on-year growth in the mobile money industry has global revenues pegged at USD 1.6 billion in 2011 alone.

“Looking at the Middle East, the mobile money sector, which includes mobile banking, is developing rapidly. Our forecast is that the trend will continue at an average growth of 88% between 2009 and 2013,” he said.

“The nineties saw the mobile phone turn from a luxury to a mass market proposition and this has enabled the launch of additional mobile services, including financial services. Today, mobile is a mainstream distribution and business channel in the financial services landscape.”

He also noted that the Middle East region hosts a large unbanked population made up of immigrant workers and young citizens, suggesting that these two groups have different needs of the services that can be provided through mobile and prepaid technologies.

Meanwhile, James Ratcliff, Editor, Cards International and spokesperson for the Prepaid Summit in Dubai said: “With almost 65% of the population under 25, the Middle East has massive potential in youth-led prepaid services, particularly in areas like online spending, events, and gift cards.”

According to Ratcliff, strong growth is also expected across travel, general purpose, remittance, payroll, and government payments sectors.

The third edition of Prepaid Summit: Middle East returns to Dubai on March 21^st with Visa International on-board for the third time in a row as the Summit’s Title Sponsor.

The one day event will see more than 200 industry experts, speakers, delegates, and market analysts come together to identify steps to create revenue models and build successful prepaid products in region.