Abu Dhabi, which owns 90% of the UAE’s oil reserves, has raised its efforts to diversify its economy in the past few years. It depended on its vast wealth and sovereign funds worth $2 trillion to increase its non-oil growth.
Abu Dhabi is coming out from Dubai’s shadow as it attracts its share of asset managers and billionaires, strengthening the position of the United Arab Emirates as a substitute for global financial centres.
Dubai has established its position as the region’s leading financial center over the past 20 years despite not having a large oil reserve with the help of low taxes, the application of English common law, and exposure to rapid economic growth.
Dubai ranks 16th globally in the most recent Global Financial Centers Index, while Abu Dhabi is 35th, and the Middle East and Africa are ranked, respectively, 1st and 2nd.
Abu Dhabi, which owns 90% of the UAE’s oil reserves, has raised its efforts to diversify its economy in the past few years. It depended on its vast wealth and sovereign funds worth $2 trillion to increase its non-oil growth.
The international financial community has noticed the rise of new companies in various sectors and new business opportunities through Abu Dhabi’s investments.
Ryan Lemand, co-founder and CEO of Neovision Wealth Management, an investment advisory and fund management company based in Abu Dhabi, states that he has observed that it has completely changed in the past year, where many money managers and hedge funds, coming to conferences to raise funds in Abu Dhabi.
Some people have set up businesses in Dubai or Abu Dhabi to take advantage of people traveling from London, New York, or Hong Kong to generate new business.
Lemand addresses the Alternative Investment Management (AIM) Summit in Dubai this week, which attracted many institutions globally, including JPMorgan Asset Management and Brevan Howard.
Dubai is still far ahead, even though the statistics of both centers were not comparable. The Dubai International Financial Centre has more than 420 wealth and asset management companies in the city, the head of wealth and asset management said at the AIM conference. Even though no latest data was available, data from the end of June shows that 112 fund businesses registered in Abu Dhabi.
They mentioned an increase in company registrations, the attraction of sovereign wealth funds, and ease of obtaining operating licenses compared to other financial centers.
Billionaire Ray Dalio, the founder of hedge funds such as Brevan Howard and Bridgewater Associates, operates in Abu Dhabi. Asset managers Nuveen and PGIM, the investment management division of U.S. insurer Prudential Financial, are new additions.
General Atlantic, a private equity firm based in New York managing $83 billion, will also participate after it receives its preliminary permission.
Abu Dhabi Global Market, the financial hub for the city, reports that many more hedge funds and asset managers have received approval in principle.
Abu Dhabi is the richest city in the world in terms of the assets owned by sovereign wealth funds, which total $1.7 trillion, with funds managing about $500 billion in Dubai, according to a Global SWF analysis published earlier this month.
Financial investors are attracted to both centers due to the ease and clarity of the regulations.
The goal of the UAE is to become a global hub for the crypto industry, with a regulator for the emerging industry based in Dubai, from 2022 and also attracting new participants.
The United States lacks a comprehensive national framework, while the European Union regulations will take effect this year, putting the United Arab Emirates ahead of major international financial centers.
Ryan Taylor, the global head of compliance of the hedge fund, told the AIM conference that Brevan Howard does most of its crypto trading from the United Arab Emirates.
Both cities put much effort into promoting travel and real estate investment, but for some, Dubai was still ahead due to its history of attracting foreign capital and having lively entertainment. Since Dubai has the tallest skyscraper in the world, it can take advantage of it with many nightclubs and high-end restaurants. has context menu
