Recently, the Dubai International Financial Centre (DIFC) has attracted several noteworthy entities, increasing the number of wealth and asset management firms to over 300. The industry size of these firms represents $450bn, with more than 150 funds domiciled in the center by the end of 2022, according to DIFC. The Middle East’s business and financial hub has $517bn in wealth, resulting in a high demand from both regional and global asset management firms to establish offices in the center.
This expansion milestone strengthens DIFC’s position as the largest financial powerhouse for wealth and asset management firms looking to tap into the region’s growing pool of affluent clients and funds. The center provides unparalleled access to MEASA’s competitive and globally connected markets, as well as deep pools of talent and expertise.
Dubai: The Wealth Creation Hub
Dubai’s exceptional legal and regulatory framework, combined with a cooperative approach among clients, regulators, and the DIFC Authority, has enhanced the asset management ecosystem’s depth and breadth.
More than 55,000 high net-worth individuals (HNWIs) reside in Dubai, with private wealth amounting to over $3tn within a one-hour flight of the city and $8tn across the Middle East region.
The presence of $8 trillion in private wealth across the Middle East, Africa, and South Asia region, according to Salmaan Jaffery, chief business development officer at DIFC Authority, provides a compelling reason for wealth and asset management firms to establish themselves in the UAE, specifically within DIFC.
Dubai, which is also a well-known hub for wealth creation, has recently seen an increase in companies expanding their footprint in the region to compete for a larger share of the Middle East wealth management market. For instance, in February, Edmond de Rothschild Group inaugurated its advisory office, Edmond de Rothschild (Middle East), within DIFC to provide a complete range of personalized services to its clients in the region.
The group has investment capabilities that prioritize conviction-driven approaches and aim to tackle the challenges facing society while supporting the significant trends that will shape the economy for years to come.
Nomura announced in December that it would be launching its global wealth management services in the Middle East via a Dubai-based branch, as the Japanese financial powerhouse aims to tap into the increasing number of affluent clients and funds flowing into the region.
The bank is looking for clients with $25 million in investable assets and a $5 million initial investment. Meanwhile, HSBC is rapidly expanding its private banking business in the UAE to become the Gulf region’s fastest-growing high-net-worth investor base. The bank is focused on meeting the needs of internationally-oriented clients with investable assets exceeding $2 million.
Other banks such as Rothschild, UBS Group, and Credit Suisse, as well as boutique firms like Moelis & Company and Lazard, are also expanding their presence in the oil-rich Middle East, particularly in Riyadh and Dubai, to cater to the growing pool of wealthy clients crowding to the region from the Americas, Europe, and Asia.
The Middle East is home to countless ultra-wealthy families, entrepreneurs, and members of royal families. According to a projection by Henley & Partners in June 2022, the UAE is expected to lead the world in attracting private wealth to its economy over the next five years, with the country anticipated to welcome 4,000 millionaires.
Driven by a rapid hike in newly registered companies, DIFC’s combined revenues rose by 18 percent YoY to Dhs1.06bn in 2022. The center’s operating profit increased by 19% to Dhs679 million in 2022, while its assets surpassed Dhs15.3 billion.
Because of its world-class legal and regulatory framework, strategic location, and large pool of super-wealthy clients, the UAE has become a hub of the leading destinations for global businesses, particularly in the wealth and asset management sector.
More than 300 companies in the asset and wealth management industry have been attracted to the Dubai International Financial Centre (DIFC) due to its important role in the business sector.
With $517 billion of wealth in the Middle East, there continues to be strong interest from global and regional asset management firms to set up an office in the center. The UAE is also home to a large number of wealthy families, entrepreneurs, and royals.
The growth of wealth and asset management in the UAE has boosted DIFC’s position as the biggest financial hub for wealth and asset management firms in the MEASA region. The center’s combined revenues and profits have seen impressive constant growth, highlighting its success in attracting new companies to the region.
With the UAE projected to take the worldwide lead in attracting private wealth to its economy over the next five years, the country’s business hub will continue to thrive. As more businesses are set up in the UAE it will contribute more in to the economic growth, and the country will undoubtedly take its place among the growing business hubs in the world.