admin Abu Dhabi: The New Frontier for Hedge Funds and Global Investors – News and Statistics
Dec 22, 2024
Abu Dhabi is rapidly establishing itself as a prime destination for hedge funds, with major industry players like Brevan Howard Asset Management and Marshall Wace already setting up operations in the city. According to a report by Bloomberg, Hillhouse Investment Management and CPE, the Chinese firm formerly known as Citic Private Equity, are in early talks to join the financial freezone in Abu Dhabi Global Market (ADGM).
This growing interest highlights a trend among Asian investment firms to expand into the United Arab Emirates, positioning cities like Abu Dhabi and Dubai as serious competitors to traditional financial centers like London and Hong Kong. The UAE’s tax-free status, strategic time zones, and abundant sovereign wealth funds make it an attractive locale for investment firms. The country boasts an impressive $1.7 trillion in sovereign wealth funds in Abu Dhabi and an additional $1.2 trillion managed by family offices in Dubai.
The Dubai International Financial Center (DIFC) also confirmed a surge in interest from Chinese companies in 2024, with entities like Dymon Asia Capital and Alp Ercils Asia Research & Capital Management having recently established operations there. In an effort to attract more Asian firms, DIFC and the Alternative Investment Management Association have co-hosted executives from Chinese wealth management firms, highlighting the UAE’s role as a gateway to other markets, such as India.
Despite these advances, the hedge fund ecosystem in the UAE faces challenges. Most investment capital remains deployed overseas, with fewer local opportunities. Infrastructure support and personnel are still largely based in traditional hubs like London and New York. The recent shelving of a planned venture by Ray Dalio and G42 is a reminder of these hurdles, despite Dalio’s praise of Abu Dhabi as a “renaissance state.”
Nevertheless, a burgeoning community of hedge fund managers is emerging in the UAE. Informal gatherings, such as the “Side Hustle Crew” in Abu Dhabi, boast a membership of 350 executives and offer niche groups focused on diverse interests like crypto, wine tasting, and golf.
In response to this growing interest, major financial institutions such as Morgan Stanley, Goldman Sachs, and JPMorgan Chase are planning events in Abu Dhabi to further engage hedge fund managers and institutional investors. Bhaskar Dasgupta, running his own family office from the emirate, shares a firsthand view of Abu Dhabi’s vibrant financial landscape, underscoring its increasing prominence in global finance.
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