Hedge funds from Britain are increasingly choosing Abu Dhabi as their new frontier, lured by the emirate's thriving financial sector and its role as a gateway to the region's burgeoning wealth. This trend comes amid a surge in Abu Dhabi Global Market (ADGM), the international financial center, which reported a staggering 211% increase in Assets Under Management (AUM) in the first quarter of 2024 compared to the same period in 2023.
This growth has been fueled by an influx of fund and asset managers. By the end of March 2024, ADGM was home to 107 such firms managing a combined 137 funds. London-based hedge fund managers are particularly enthusiastic about Abu Dhabi's potential. They view the emirate as a strategic launchpad to capitalize on the Middle East's investment opportunities. This sentiment is echoed by billionaire Chris Hohn, founder of TCI Fund Management, a $60 billion hedge fund. TCI established its Abu Dhabi office in November 2023, citing the region's significance for "both talent and asset growth. " Hohn further emphasized the emirate's potential as a key partner in tackling climate change, a cause he passionately champions.
Capula Investment Management, another London hedge fund giant, is reportedly considering opening an Abu Dhabi office to expand its operations in the emirate. This news follows the substantial growth witnessed by ADGM. Industry insiders suggest that more UK hedge fund firms are likely to follow suit, enticed by the attractive business environment Abu Dhabi offers.
Abu Dhabi's emergence as a hedge fund hub can be attributed to several factors. The emirate's robust regulatory framework, designed to be competitive and business-friendly, is a major draw. ADGM provides a platform for asset managers to operate under a common law system, ensuring familiarity and ease of doing business. Additionally, the emirate boasts a highly skilled workforce and a commitment to attracting and retaining top talent. This focus on human capital ensures access to a qualified workforce that meets the demands of the financial services industry.
Furthermore, Abu Dhabi's geographical location offers a strategic advantage. The emirate is ideally situated to cater to investors from across the Middle East, North Africa, and South Asia. This proximity to a vast and wealthy region makes Abu Dhabi an attractive proposition for hedge funds seeking to expand their reach and capture new investment opportunities.
The influx of UK hedge funds into Abu Dhabi signifies a growing recognition of the emirate's potential as a global financial center. As Abu Dhabi continues to develop its infrastructure and regulatory framework, it is well-positioned to become a prominent player in the hedge fund industry, attracting not just British firms but also hedge funds from around the world.