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Abu Dhabi Global Markets (ADGM), the emirate’s financial free zone, expects a stellar performance in 2024, led by asset management and hedge fund firms, with more than 70% of companies in the zone planning to expand their workforce this year, according to the CEO of ADGM Authority, Salem Mohammed Al Darei.
ADGM is a single gateway for global financial institutions to come to Abu Dhabi, whose sovereign wealth funds, amounting to more than $2 trillion, are a big draw. Among the top names parked in the financial centre are Brevan Howard, Ardian, Goldman Sachs, Blackstone, Rothschild & Co. and Morgan Stanley.
The financial centre marked an increase of 211% in assets under management (AUM) compared to the first quarter of 2023, reaffirming the emirate’s position as a global financial powerhouse and a destination of choice for regional and global entities.
By the end of March 2024, the number of funds and asset managers operating in ADGM reached 107, managing a total of 137 funds. “Asset management is poised to take the lead this year. Following closely are the fintech, digital assets, private banking and wealth management firms,” Al Darei told Zawya.
“By the end of March 2024, ADGM’s workforce had climbed to more then 25,000. According to an internal survey conducted by ADGM, 71% of [the] companies anticipate expanding their workforce in ADGM during 2024,” he added.
Salem Al Darei took over the leadership of ADGM in September 2023. Prior to this, he was the ADNOC Group’s chief legal counsel, a member of the ADNOC Executive Leadership Team and a board member across various ADNOC Group companies.
“ADGM’s proximity to SWFs and deep pockets for capital in Abu Dhabi has helped build the UAE’s capital prestige and positioned itself as a conduit to Abu Dhabi’s rising Economy,” he said.
The total number of operational entities in the centre increased by 30% compared to the same period last year, to reach 1,950, including 291 financial services entities.
Al Darei confirmed that ADGM will continue to amplify the ecosystem in Abu Dhabi for global financial institutions, family offices, entrepreneurs and leading fintech businesses.
Billionaire Ray Dalio, founder of hedge fund Bridgewater Associates, has launched a regional family office in Abu Dhabi and Brevan Howard Asset Management, one of the world’s biggest hedge funds, also opened an office in ADGM. Egyptian billionaire Nassef Sawiris is also moving his family office to ADGM.
In March, SS&C Technologies and Holdings announced an expansion of its global footprint by opening a new office in ADGM. With more than $2 trillion in assets under administration, SS&C GlobeOp is the leading alternatives fund administrator worldwide.
According to the Statistics Centre – Abu Dhabi (SCAD), financial and insurance activities achieved the highest growth rate, 25.5%, in 2023 as well as their best performance in terms of value, at AED79 billion, with a contribution to the GDP exceeding 6.9%, reflecting the growing confidence of the international community in the emirate’s economy.
"We see significant growth going forward. The aim is to increase the contribution of the financial services sector to Abu Dhabi's GDP," he said.
The Financial Services Regulatory Authority (FSRA) of ADGM has been a key vertical in fostering a progressive regulatory framework, which is a key attraction for leading investors looking to set up an office in the UAE capital.
“The ADGM continues to build digital capabilities in both regulatory technology (RegTech) and supervisory technology (SupTech) to not only supervise but also support the financial services industry’s compliance capabilities,” Al Darei said. “Our end goal is to build a more secure, efficient, and innovative financial ecosystem that is both progressive and functional.”
Some of its key partnerships in the regulatory landscape include membership of the International Forum of Independent Audit Regulators (IFIAR) as well as a partnership with the Solana Foundation, aimed at enhancing distributed ledger technology (DLT) solutions and advancing blockchain innovation.
Expanding jurisdiction
ADGM is continuing with its efforts to expand its jurisdiction to Al Reem Island, a bustling community with residential, retail and commercial units.
Previously governed by UAE federal and Abu Dhabi local laws, Al Reem Island, which is connected to Abu Dhabi city by bridges, now forms part of ADGM and falls under its legal system.
"Following the expansion of the jurisdiction of ADGM to Al Reem Island, ADGM has become one of the largest financial districts in the world, totalling 14.38 million sqm," Al Darei said.
From the 1st of November 2023, all new businesses planning to establish their presence on Al Reem Island have been mandated to secure a commercial licence from ADGM rather than the Abu Dhabi Department of Economic Development (ADDED).
Businesses in Al Reem will have until 31 December 2024 to transition to ADGM's legal and regulatory framework.
(Reporting by Seban Scaria; editing by Daniel Luiz)
seban.scaria@lseg.com
