With central banks shifting rates, geopolitical risks, and market volatility still very much in focus, Vault is helping GCC investors navigate a changing landscape — from resilient yield-generating portfolios to greater access to private markets. Joining us is Hatim Abdelkhalek, Director of Wealth and Portfolio Management at Vault Wealth. Hatim, welcome to Capital Markets Wall Street to Mena.
Thanks for having me.
With central banks adjusting rates and ongoing geopolitical noise, what is the Vault house view on global asset allocation for the rest of the year?
It has been an interesting year. From an equity markets perspective, the S&P 500 and MSCI All Country World Index are both positive, up 14 to 15% year to date. What has been challenged is fixed income — bond markets have been negative for the year. The Bloomberg Global Aggregate is negative, challenged by central bank rate hikes in the US, eurozone, and Asia. In terms of where we see opportunities: we are currently overweight emerging markets, especially in Asia. We have been adding more private infrastructure to client portfolios — resilient assets that generate income and yield, and there is a big appetite for yield here in the region. We have also been adding to commodities. Gold remains one of the biggest holdings in central bank balance sheets. And we have a small satellite position in uranium — because it could be viewed as a way to play the AI trade. Uranium will be used in nuclear energy that powers data centres. In terms of underweights, we have been underweight high yield because spreads are way too tight and do not warrant the extra credit risk. And we have stayed away from private credit for now.
Tell us about the typical client profile at Vault and how it differs from a traditional private bank.
I would categorise our clients into three segments — all high net worth individuals, entities, or family offices, typically in the UAE and Saudi Arabia since we are regulated in both. The first profile is the over-cashed investor. In North America 85% of liquid wealth is typically invested. Here in the region it is actually 85% in cash. These are people creating a cash drag that is preventing them from reaching their financial objectives. The second profile is the over-concentrated investor — it is not uncommon here for people to buy the first property, the second, the third, the fourth, and then realise they have made the mistake of overweighting real estate which can become illiquid in periods of stress. The third profile is the self-made investor — people who have accumulated considerable wealth themselves and now need professional support to diversify further and enhance risk-adjusted returns.
How does Vault construct resilient portfolios that balance yield with long-term capital preservation?
We look at portfolio construction as core and satellites. The core portfolio is very well diversified across regions and sectors — stocks, bonds, and low cost ETFs, typically Ireland-domiciled and traded on the London Stock Exchange to avoid US estate tax and the full 30% withholding tax on dividend distributions. Around that core we add satellite positions — commodities, specific sectors we believe in. For example, a sector we are overweight is healthcare. If you look at Japan, they have sold more adult diapers than baby diapers for the past ten years in a row — that is an attractive opportunity for a long-term capital allocator. And we can also add private market funds as a satellite position.
Private markets have traditionally required very large minimum investments. How is Vault working to democratise access?
There has been a lot of appetite for private market funds from institutional investors. Abu Dhabi Investment Authority — not too far from where we are sitting — is one of the biggest allocators of capital and has been gradually adding to private market funds. We have seen that appetite from retail and high-net-worth investors too. A few years ago you needed $5 to $10 million to access these asset classes. Now asset managers are democratising access through feeder funds with minimums starting at $25,000 to $125,000 — giving access to strategies that were out of reach for most investors just a few years ago.
My pleasure.
