Jim Leggate is the new managing director of the Middle East region for Russell Investments (RI), an international investment management company. He explains why it is opening its first office in the region, 30 years after it entered the market.
You have been operating in the Middle East for the past 30 years, so why open an office now?
We've been acting through various partnerships in the region, through Jadwa Investment in Saudi Arabia and through Rayan Asset Management in Dubai, so they have been our partners in the region since 2002 for Rayan and 2007 for Jadwa. The regulatory framework is changing and is ripe and capital market infrastructure is developing … so we believe now is the right time for a company like Russell Investments to be present in the region.
In what way has the regulatory environment changed?
If you take the UAE for example, the UAE hasn't always been on the investment horizon for institutional investors around the world, for a number of reasons. One is regulation, and that could be regulation around custody, that could be regulation around trading and ownership and foreign ownership. There have been a number of changes that the market has witnessed over the last five to 10 years that means investors are now looking [and] as they look to realign risk in their portfolio … to understand what other emerging markets should we be investing in.
Are you planning to manage the entire Middle East out of the Dubai office?
Initially yes … we will be supporting both of those partnerships, but also in building direct relationships through those distribution partnerships but also on our own with key organisations in the region.
How will you expand when people are so scared of trading?
I think this is where the history and expertise of RI comes into its own because when people are looking to execute in highly volatile markets they want to make sure someone is working their particular trades or their particular transition or whatever they're trying to do with an entity which is acting on their behalf as an agent and not a principal.
What advice would you give institutional investors at this volatile time?
Long-term investment and asset allocation horizon basically can be altered at the margin in highly volatile times and you can make tactical changes to your portfolio, but when you're talking about the size of some of these institutional investors it may hurt your portfolio more by making interim changes.
So keep it as is?
We have gone through these volatile times before in 2008 and 2009, so people will have learnt from that and structured their investments in such a way that it will maybe correspond well with highly volatile times. But yes, a knee-jerk reaction isn't what is really required at this time.