Money managers meet in Dubai to debate meltdown as worldwide recession begins to bite

The forecast was made at the two-day Global Alternative Investment Management (GAIM) Middle East conference at the Dubai International Convention and Exhibition Centre.

Conference chairman Adnan Hassan, Chairman and CEO of Mecasa Advisors and a former senior advisor at the World Bank, said the world was experiencing the economic equivalent of a 9/11 with the world's investment framework entirely changed.

He identified Islamic finance, sovereign funds, financial regulators and commodities as potential eventual winners.

"On a global scale, Islamic finance is currently relatively small but it is more conventional, traditional and more conservative banking and conservative banking is back on a global scale." he said.

Leading members of the Middle East's independent, institutional and sovereign wealth investment community are taking part in the GAIM conference to attempt to plot a course through financial turmoil and economic slowdown affecting the world and the region.

Governments and regulators worldwide were now "rewriting the rules of the game we play by," said Pippa Malmgren, President of the Canonbury Group of the UK.

"This is a ferocious political environment where leaders around the world want to protect the public from the damage in the financial markets," she added.

The depth and extent of the recession in the United States, where the global financial crisis began, could last for six consecutive quarters with a peak-to-trough spread of between 6 and 10%, according to Bruce Richards, CEO of Marathon of the US.

He added that credit defaults in the US market were "not yet close" to the levels they will reach in coming months.

Walid Hayeck, Director of Asset Manager at the National Investor of the United Arab Emirates, said the effects of the global crisis had yet to be fully felt in the region which could take another six to 12 months to filter though.

In the meantime, investors should reposition themselves.

Joseph Joseph, Senior Investment Manager of Global Investment House, Kuwait, said the best thing Gulf governments and wealth funds could do in the current climate was to support infrastructure projects and efficient regional businesses.

Participants in the GAIM Middle East event include high net worth investors; family offices; sovereign wealth funds and government investment offices; funds, endowments and foundations; portfolio, fund and investment managers; investment bankers; brokers; law and accounting firms and government executives.

Among topics under discussion at the conference are the future for environmentally driven investing; real estate dilemmas; opportunities in real assets such as commodities including gold, agriculture and infrastructure; as well as strategies for dealing with dislocated markets.

GAIM Middle East, jointly organised by IIR Middle East and IIR USA, has received high level support including Shuaa Asset Management as founding sponsor; Global Investment House as platinum sponsor; The National Investor as gala dinner sponsor, among others.