Why Dubai is the new wealth and asset management global hotspot

The Dubai International Financial Centre (DIFC) has attracted several notable names recently, taking the total number of wealth and asset management companies to over 300.

The financial hub’s 300 wealth management firms represent an industry size of $450bn. DIFC said more than 150 funds were domiciled in the centre by the end of 2022.

With $517bn of wealth in the Middle East’s business and financial hub, there continues to be strong interest from global and regional asset management firms to set up an office in the centre.

The growth milestone cements DIFC’s position as the biggest financial hub for wealth and asset management companies looking to tap the growing pool of rich clients and flow of funds across the Middle East, Africa and South Asia (MEASA) region.

The centre provides unrivalled access to the MEASA region’s competitive and globally connected markets as well as deep pools of talent and expertise.

The number of wealth and asset management companies registered in #DIFC has exceeded 300 companies, with a total size of $450 billion. Recently, the centre has attracted several notable companies such as @EdeRothschild, EnTrust Global, @Nomura, and @TheFamilyOffice Company. pic.twitter.com/PSyYELvZCO

— DIFC (@DIFC) April 4, 2023

Dubai’s world-class legal and regulatory framework together with a collaborative approach between clients, regulators and DIFC Authority have bolstered the depth and breadth of its asset management ecosystem.

Dubai is also home to more than 55,000 high net-worth individuals (HNWIs) and over $3tn of private wealth is within an hour’s flight of the city and $8tn across the Middle East region.

Read: Dubai’s DIFC enacts new regulations for family-owned businesses, UHNWIs

“The $8tn of private wealth across the Middle East, Africa and South Asia region provides wealth & asset management firms with a compelling reason to establish in the UAE, specifically in DIFC,” said Salmaan Jaffery, chief business development officer at DIFC Authority.

Hotbed of wealth creation

Meanwhile, Dubai, one of the world’s hotbeds of wealth creation, has seen an increase in companies that are strengthening their presence in the region as they vie to capture a bigger slice of the wealth management market in the Middle East.

Edmond de Rothschild Group opened its advisory office – Edmond de Rothschild (Middle East)  – in the DIFC in February to deliver a full range of bespoke services to its clientele in the region. Edmond de Rothschild has conviction-driven investment capabilities designed to address the challenges that face our society and accompany major trends that will shape the economy for several decades.

Read: Edmond de Rothschild opens office in Dubai’s DIFC, aims to broaden regional presence

Nomura said it is bringing its global wealth management services to the Middle East through a branch in Dubai last December as the Japanese financial powerhouse seeks to tap a growing pool of rich clients and flow of funds to the region. HSBC is also expanding its private banking business in the UAE to cater to a fast-growing HNW investor base in the Gulf state.

Nomura is targeting clients with $25 million of investable assets and an initial investment of about $5 million while HSBC caters to the needs of internationally-minded clients with investable assets of over $2 million.

Other banks including Rothschild, UBS Group and Credit Suisse and boutique firms such as Moelis & Company and Lazard are growing their presence in the oil-rich Middle East, especially Riyadh and Dubai, to tap into a growing pool of affluent clients flocking to the region from the Americas, Europe and Asia.

The Middle East is home to a large number of ultra-wealthy families, entrepreneurs and royals. Henley & Partners projected in June 2022 that the UAE will lead the world in attracting private wealth to its economy over the next five years as the country is expected to welcome 4,000 millionaires.

DIFC’s combined revenues jumped by 18 per cent year-on-year to Dhs1.06bn from Dhs897m in 2022 driven by a sharp increase in newly registered companies.

The centre’s operating profit rose by 19 per cent to Dhs679m in 2022 while its assets crossed Dhs15.3bn.

Read: Dubai’s DIFC registers highest ever revenue in 2022