Hedge funds from London are increasingly eyeing Abu Dhabi as a prime location for expansion, drawn by the emirate's thriving financial sector and its role as a gateway to the burgeoning wealth of the region. This trend comes amid a surge in assets under management (AUM) overseen by Abu Dhabi Global Markets (ADGM), the emirate's international financial center.
ADGM reported a staggering 211% increase in AUM in the first quarter of 2024 compared to the same period in 2023. This growth has been accompanied by a rise in the number of fund and asset managers operating within ADGM. By the end of March 2024, there were 107 such firms managing 137 funds, reflecting a significant uptick from previous figures.
One factor driving the interest of UK hedge funds is the recognition of Abu Dhabi as a strategic hub for accessing the wealth concentrated in the Middle East. The region's growing affluence presents a lucrative opportunity for investment management firms. Furthermore, some hedge funds, such as TCI Fund Management, established a presence in Abu Dhabi to cultivate "key regional relationships, " as stated by Christopher Hohn, the firm's founder.
The decision by TCI Fund Management, a London-based hedge fund with a staggering $60 billion portfolio, to open an office in Abu Dhabi in November 2023 served as a bellwether for the trend. Industry insiders suggest that London-based Capula Investment Management is also contemplating establishing an Abu Dhabi office, underscoring the growing appeal of the emirate as a financial destination.
This influx of UK hedge funds is anticipated to bring a wealth of expertise and knowledge to Abu Dhabi's financial sector. The move is mutually beneficial, with hedge funds gaining access to the Middle East's vast resources and investors in the region gaining exposure to a wider range of investment opportunities.
Analysts believe that Abu Dhabi's efforts to create a robust and well-regulated financial ecosystem, coupled with its strategic geographic location, are key factors behind its growing allure. The emirate has implemented a variety of initiatives to streamline business set-up, making it an attractive proposition for foreign firms.
Looking ahead, experts anticipate a continued rise in the number of UK hedge funds establishing a presence in Abu Dhabi. This trend is likely to be further amplified by the emirate's ongoing efforts to solidify its position as a premier financial hub in the region.