Complex Made Simple

Deloitte: Investment fund products evolve to target private investors

-Deloitte: The stability of regulatory and legal environments is a requirement for asset management development

Historically, asset management activities in the Middle East have focused on Sovereign Wealth Funds (SWFs) and other institutional investors. However, asset managers are now increasing their range of investment fund products in the region to specifically target the private investors. At the same time, regulatory frameworks are evolving across the different regional financial markets (e.g. DIFC, ADGM, QFC) and will further help the development of the region’s asset management industry.

“This evolution is creating both opportunities and challenges. As industry practices become more transparent, investor confidence and operator interest will continue to grow,” said Umair Hameed, Director, Monitor Deloitte.

“At the same time, the complexity and cost of ensuring compliance with tightening regulatory standards will increase, especially when considering the multiple, country-specific frameworks present in the region.”

These challenges are among the topics discussed in the fall 2015 issue of Deloitte’s quarterly publication, the “Middle East Point of View” (ME PoV).

In “Mixin’ it up”, Joaquin Martinez, Senior Manager, Sports and Events Management Consulting, at Deloitte in the Middle East, further discusses asset management from the perspective of commercialization opportunities in GCC sports venues. In his article, Martinez showcases the opportunities available in the region and steps to introduce these complementary activities as part of the sports venue’s value proposition.

Over the past decade central governments in various countries around the world have adopted or are implementing accrual accounting, moving from their legacy cash or modified cash basis of accounting.

Mohammad Jallad, Audit Partner, and Faisal Darras, Operations Consulting Director at Deloitte in the Middle East, in their article “Accrual accounting is for the public sector too”, offer a perspective on the subject for Arab countries.

The authors state: “Arab central governments show promising progress in the accrual accounting International Public Sector Accounting Standards (IPSAS) adoption programs, which have so far led to updating relevant laws and regulations, redesigning charts of accounts, developing new accounting policies and processes and implementing financial management information systems.”

To this end, Deloitte professionals are focusing their efforts in advising and working hand-in-hand with public sector clients in the adoption of accrual accounting IPSAS.

Islamic Finance is also among the series of topics discussed in this issue of the Deloitte Middle East Point of View. Bhavin Shah, Director, and Saad Qureshi, Manager, Forensic, Deloitte Corporate Finance Limited (regulated by Dubai Financial Services Authority), discuss Islamic banking as an exported notion under scrutiny.

“The challenge is that there is no central authority promulgating Shari’a law, and the understanding of what is hence permissible and what is not varies among Islamic scholars and jurisdictions,” say these authors. “The harmonization of Shari’a compliance is a critically important component to ensuring the stability, which is intrinsic to the Islamic finance model.”

The fall issue of the ME PoV publication also explores other hot topics in the region including technology, operational excellence, energy and resources, and social media.

In “Big Data, mining a national resource”, Emanuel Durou, Partner, Technology, Media and Telecommunication, Monitor Deloitte Middle East, talks about improving the government’s ability to extract insights from a large volume of information and complex data sets which is increasingly topping the national agendas of governments in the Middle East.

In “Journey to Excellence” by Tarek Nahle, Director, and Joana Abou Jaoude, Senior Manager, Consulting, at Deloitte in the Middle East, the concept of improving one’s space is examined through their article on excellence standards and e-initiatives that “have improved service quality and costumer experience.”

As social media becomes the new standard, companies need to learn how to attract and use that power for their own benefit, says Elissar Hajj, Senior Manager, Brand and Communications, Deloitte Middle East, in her article “Like it or not, here I am.” In trying to harness the people power of “Social,” Hajj advises company leaders to ask not “how social are my employees” but how “social is my company?”