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Asia is “compelling” but Middle East has biggest immediate opportunities, Investcorp chief says

Investcorp says the Middle East has all the ingredients of a solid momentum
By Goh Thean Eu   
November 17, 2021

Asia is “compelling” but the Middle East is expected to offer the biggest immediate investment opportunities, though the US is likely still the best for long-term opportunities, according to Hazeem Ben-Gacem, co-chief executive officer of Bahrain-based asset manager Investcorp.

"I love the US for its resilience, and I love Asia for its growth. The macro momentum in Asia is compelling. However, the biggest immediate opportunity would be the Middle East," he said in a panel discussion at the Milken Institute Asia Summit 2021 in Singapore on November 15.

He cited several metrics for his assessment of the Middle East, including a US$1.5 trillion economy and one of the highest gross domestic product per capita in the world. In addition, he noted that 85% of the population are in key cities, and about two-thirds are below 24 years old.

"It has all the ingredients of a solid momentum," Ben-Gacem said.

However, he said the biggest long-term opportunities are in North America. "It is the single geography that survived the test of time. It is resilient. Very few nations can talk about their resilience for decades.”

Fellow panellist Jeffrey Jaensubhakij, group chief investment officer of Singapore sovereign wealth fund GIC Pte Ltd, agreed that the US is an attractive and resilient market, but argued that investors have already priced this in.

According to Jaensubhakij, the key to capturing growth opportunities lies in how a company or region makes progress on sustainability.

"Today, companies that currently look like they are the worst in terms of sustainability, if they are able to pivot around, make decisions that allow them to be more sustainable, suddenly the market will reward them for the climb up," he said. "I think it is the same with regions. Today, there are many regions that are priced to fail, but the US is priced to continue to succeed."

He said investors will reprice a country or a region where the government succeeds in creating an environment that is “more immutable” for innovation, technology adoption and capitalism.

"Many Asian countries are in this category, I think other regions as well,” he said. “Europe has been an interesting region for us. For the investments you make, you can get returns as good as the US, but there are just fewer of them.”