By Nell Mackenzie, Federico Maccioni and Hadeel Al Sayegh
DUBAI (Reuters) – Abu Dhabi is emerging from Dubai’s shadow as it attracts its own share of asset managers’ and billionaires wealth, helping cement United Arab Emirates’ role as an alternative to global financial hubs.
Lacking rich oil reserves, Dubai has built up over the past two decades its position as the region’s No. 1 financial centre, with its allure of low taxes, the application of English common law and exposure to the region’s brisk economic growth.
Globally, Dubai ranks 16th in the latest tally from the Global Financial Centres Index, while Abu Dhabi is 35th, with both number one and two, respectively, for the Middle East and Africa region.
But over the past few years Abu Dhabi, which holds 90% of UAE’s oil reserves, has accelerated efforts to diversify its economy, leaning on its vast wealth and sovereign funds that together manage almost $2 trillion to boost non-oil growth.
The emergence of companies in a range of new sectors and potential for business created by Abu Dhabi’s investments have not gone unnoticed in the international financial community.
“It’s completely changed in the past year, there’s been an influx of money managers, hedge funds, alternatives etc. coming to conferences to raise funds here,” said Ryan Lemand, co-founder and CEO of Abu Dhabi-based fund management and investment advisory firm, Neovision Wealth Management.
Some have already set up shop in Dubai, or increasingly, Abu Dhabi to gain an edge over those travelling from London, New York, or Hong Kong to drum up new business.
Lemand was speaking ahead of this week’s Alternative Investment Management (AIM) Summit in Dubai that drew hundreds of institutions from across the globe, including names like Brevan Howard and JPMorgan Asset Management.
While statistics for both centres are not entirely comparable, they show Dubai remains well ahead. The Dubai International Financial Centre currently has so far over 420 wealth and asset management firms operating in the city, its head of wealth and asset management said at the AIM conference. There were no recent figures for Abu Dhabi and data from end of June showed 112 fund firms registered there.
The latter, has clear momentum, though, according to eight attendees of the AIM Summit.
NEW ARRIVALS
They cited rising company registrations, the draw of sovereign wealth funds and the ease of obtaining a license to operate compared with other financial centres and now at par with Dubai’s. They spoke on background because the subject matter was sensitive to their business.