Western banking crisis will boost Gulf inflows

Dubai: The turbulence in the US and European financial systems will cause a "huge transfer" of wealth from the West to the East, according to a British fund manager.

With the asset bubble built on credit having been burst in the US and its contagion effects reaching other established financial centres, developing markets such as those in the Gulf and Asia are considered offering safer investment opportunities.

Robin Farrell, CEO of London-based Arch Group, believes this provides new asset management opportunities to his company.

Wealth transfer

"There should be huge transfer of wealth from the West to the East. The failure of leveraged system is causing deflation in the West," Farrell told Gulf News after announcing that his company has acquired 48 per cent stake in Financial Partners (FP), a financial services firm with operations in the Middle East and Asia.

The move is expected to help Arch, which has about $2 billion worth of assets, to tap wealth management and investment advisory services opportunities in the Gulf and East Asia.

"The new shareholding structure, together with the introduction of additional capital and strategic investment, gives FP Group a significantly strengthened capital base with which to implement its future plans," FP Group said.

Sean Kelleher, the group's chairman, said banks have not tapped "three highly distinct niches" of expanding expatriate population, upwardly mobile individuals, and small businesses.