Oct 24 2024: Abu Dhabi is stepping out of Dubai’s shadow, drawing its share of asset managers and billionaire wealth, further establishing the United Arab Emirates (UAE) as an alternative to the world’s top financial hubs.
While Dubai has cemented its position as the Middle East’s leading financial center over the past two decades—thanks to low taxes, the use of English common law, and rapid economic growth—Abu Dhabi is catching up. According to the latest Global Financial Centres Index, Dubai ranks 16th globally and Abu Dhabi 35th, but both cities lead in the Middle East and Africa region.
Abu Dhabi, which holds 90% of the UAE’s oil reserves, has been accelerating efforts to diversify its economy. It’s leveraging its vast wealth and sovereign funds, which together manage nearly $2 trillion, to promote non-oil growth. The capital’s investments in new sectors have caught the attention of international financial institutions.
“There has been a significant increase in the number of money managers, hedge funds, and alternative investors attending conferences to raise funds here,” said Ryan Lemand, co-founder and CEO of Abu Dhabi-based Neovision Wealth Management. Many firms are setting up operations in either Dubai or increasingly Abu Dhabi to gain proximity to new business opportunities.
The Alternative Investment Management (AIM) Summit in Dubai, which attracted global institutions like Brevan Howard and JPMorgan Asset Management, highlights the UAE’s rising prominence in finance. Dubai remains ahead, with over 420 wealth and asset management firms in its Dubai International Financial Centre (DIFC). In comparison, Abu Dhabi’s Global Market registered 112 fund firms as of June.
Abu Dhabi, however, is gaining momentum. Attendees of the AIM Summit cited an increase in company registrations, the appeal of sovereign wealth funds, and the ease of obtaining licenses as factors contributing to Abu Dhabi’s rise. Billionaire Ray Dalio’s Bridgewater Associates, along with Brevan Howard, PGIM, Nuveen, and private equity firm General Atlantic, have either established or are in the process of setting up operations in Abu Dhabi.
Abu Dhabi holds the title of the world’s wealthiest city based on sovereign wealth fund assets, with its funds managing around $1.7 trillion. By comparison, Dubai’s sovereign wealth funds manage about $500 billion, according to a recent Global SWF report.
The UAE’s clear and favorable regulatory environment has also been a major attraction for financial investors. Brandon Robinson, deputy head of private markets at JPMorgan Asset Management, highlighted the appeal of the regulatory framework in both cities. The UAE is also positioning itself as a global hub for the crypto industry, with Dubai’s regulator for the emerging sector in place since 2022. This places the UAE ahead of other financial hubs like the U.S. and European Union, which lack comprehensive national frameworks for crypto regulation.
Brevan Howard conducts much of its crypto trading from the UAE, according to Ryan Taylor, group head of compliance at the hedge fund. Both Dubai and Abu Dhabi are also working to boost tourism and property investment. Dubai, with its longer track record of attracting international finance, remains ahead in areas like vibrant entertainment, nightlife, and high-end dining. As one hedge fund professional noted, the atmosphere in Dubai’s financial district is “buzzing,” driven by its appeal as a global destination.
