Largest Institutional Investors and Asset Managers | UAE
Dubai currently ranks as the world’s 17th most important financial center according to the Global Financial Centre Index. Notably, Dubai ranks ahead of major European economic hubs such as Berlin, Geneva, and Luxembourg. Z/Yen Partners, in conjunction with the China Development Institute, researches and compiles this list annually. According to Salmaan Jaffery, chief business development officer for the Dubai International Financial Centre (DIFC), investment firms within the DIFC currently manage about US$500 billion of assets. In aggregate, about 30,000 people are currently employed in the DIFC.
Hedge funds are establishing offices in Dubai, and in some cases are re-locating their headquarters to the UAE’s most populous city. The UAE’s tax-free status, reduced licensing fees and capital requirements, and the significant influx of the very wealthy into the country, together with the oil windfall which commenced in the fall of 2021, have all made Dubai an increasingly attractive money management location. In addition, UAE’s geographic location represents an operational advantage for hedge funds. Its time zone allows staff to easily trade the time zones of both Europe and Asia.
More specifically, about 4,000 millionaires (net) are expected to emigrate to the UAE just this year, according to the Henley & Partners consulting firm. These newcomers include Asians who no longer want to endure pandemic lockdowns, newly-minted cryptocurrency moguls, and high-level professionals who benefit from the UAE’s relaxed visa policies.
Restrictions at other traditional hedge fund centers have also played a favorable role in the relocations of professionals to the UAE. For example, new Brexit trading rules are prompting money managers to reconsider London as a base; strict COVID regulations and the increasing influence of mainland China are negatively coloring perceptions of Hong Kong; and tight visa requirements which make it more difficult to establish family offices are having a similar impact on Singapore’s money management industry.
(Successfully convincing investment management operations to relocate to Dubai from Hong Kong could have a dramatic impact on Dubai if only a small fraction of the more than US$50 trillion that is managed there were to be transferred to Dubai. An early potential example: according to the Financial Times, ARCM, a Hong Kong-based hedge fund, is mulling whether to open an office in Dubai. Hong Kong has already seen thousands of investment professionals depart for other locations.)
Largest Conventional Investment Funds Operating in the UAE
In the following paragraphs, we list the fifteen largest funds currently operating in the UAE, according to a study by The Ritz Herald, a publication which tracks news on corporate analytics. We also provide a thumbnail description of each company. In aggregate, the 15 investment firms control and allocate US375 billion of assets.
- Dubai Investment Fund (DIF) (US$320 billion in assets under management, or AUM). DIF has built a global portfolio of assets in the real estate, blockchain and cryptocurrencies, infrastructure, technology, media and telecom, healthcare, and financial sectors. The fund has 920 investment professionals.
- KAMCO Investment Company (US$14.6 billion in AUM). Established in 1998 as a subsidiary of United Gulf Bank, KAMCO has a large asset management arm and provides financial services in Kuwait, the Middle East and North Africa.
- SHUAA Capital (US$13 billion in AUM). SHUAA has two key business segments: asset management and investment banking. Its asset management unit invests in publicly-listed securities through fund structures with a specific focus on Middle East markets, and in private market investments. Private investments represent growth capital which boosts a company’s organic growth or allows it to make synergistic bolt-on acquisitions. SHUAA’s investment banking operations serve institutional clients across the Middle East-North Africa (MENA) region.
- Emirates NBD Asset Management (US$6.1 billion in AUM). Not only one of the largest asset managers in the Middle East, Emirates NBD also is among the most established money management firms in the region. It was launched in August 2006. Emirates NBD offers a diverse range of funds and segregated mandate products to institutional and retail clients.
- Dubai Investments (US$6 billion in AUM). Incorporated in 1995 and listed on the Dubai Financial Market in 2000, Dubai Investments has more than 15,600 shareholders. It invests primarily in the real estate, industrial, financial, healthcare, and education sectors. Notably, the share price of Dubai Investments has risen nearly 20% so far in 2022.
- Alkhair Capital (US$3 billion in AUM). Alkhair Capital has a presence in a number of leading Islamic Finance hubs. The firm was founded in 2014. Alkhair’s asset managers tailor Sharia-compliant solutions for its clients.
- Gulf Capital (US$2.5 billion in AUM). Gulf Capital is a leading thematically-driven growth capital investor. It focuses on technology and fintech, healthcare, business services, and consumer and sustainability. Operating since 2006, Gulf Capital has 48 employees, including 18 investment professionals.
- ADCB Asset Management (US$2 billion in AUM). A full-service commercial bank, ADCB was formed in 1985 and is 62.5% owned by the Abu Dhabi Investment Council. ADCB Asset Management has been managing money since 2005. Its core strength is its understanding of regional markets.
- Mashreq Capital (US$1.8 billion in AUM). A wholly-owned subsidiary of Mashreq Bank PSC, one of the UAE’s leading financial institutions, Mashreq Capital manages six conventional and Sharia-compliant funds, as well as a number of discretionary portfolios, for institutional investors and ultra-high net worth individual investors.
- Waha Capital (US$1.7 billion in AUM). An Abu Dhabi-listed investment management company, Waha Capital manages global and regional credit and equity funds. In addition, Waha’s Private Investment Unit deploys capital across a variety of sectors and geographies. Waha has many prominent local shareholders, including Mubadala Development Company.
- Ithmar Capital (US$1.2 billion in AUM). Ithmar Capital focuses on special situations in public equities, particularly in healthcare and education, as well as niche real estate opportunities. Since inception, Ithmar has posted a remarkable 19% internal rate of return (IRR) on its investments since inception. Even more impressive, the firm’s investments in education and healthcare have realized a 45% IRR since inception.
- Safanad (US$1.2 billion in AUM). Safanad is a real estate and private equity investment firm employing about 50 investment professionals with offices in Dubai, New York and London. The firm is global in its approach. Also, its investment professionals have completed in excess of 40 transactions with an aggregate value of US$10 billion since 2009.
- NBK Capital Partners (US$1.1 billion in AUM). NBK Capital Partners, which was founded in 2005 as a unit of the National Bank of Kuwait, is a leading alternative investment manager. It invests primarily in private equity, private credit, and real estate across the Gulf Cooperation Council (GCC), Turkey and North Africa. The GCC consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
- Fajr Capital (US$700 million in AUM). A leading Dubai-based private equity firm, Fajr Capital invests in high-growth companies and supports their long-term strategic development. Its founding shareholders include some of the world’s leading sovereign wealth funds: Abu Dhabi Investment Council, the Brunei Investment Agency, the Government of Brunei Darussalam, and Khazanah Nasional, Malaysia’s strategic investment arm.
- Samena Capital (US$390 million in AUM). Samena utilizes three main investment strategies: private equity, direct investments and credit. It focuses on a wide geographic area including the Indian Subcontinent, Asia, the Middle East, and North Africa, called the SAMENA region. Samena Capital has raised more than US$1.5 billion of capital from investors since 2008 and has returned US$950 million through full and partial exits from investments.
Sovereign Wealth Funds
The UAE is home to a number of sovereign wealth funds (SWFs) . The five largest have aggregate assets of US$1.4 trillion; all rank as among the 20 largest in the world.
- Abu Dhabi Investment Authority (ADIA), which has assets of US$829 billion, is the world’s fourth largest sovereign wealth fund. (Norway’s SWF and two China-based SWFs are the three largest in the world.) ADIA is a globally diversified investment institution that was established in 1976.
- Investment Corporation of Dubai, which has assets of US$300 billion and was established in 2006, manages a broad portfolio of assets, both locally and internationally.
- Established in 2017, Mubadala Investment Company (US$243 billion) has purchased business stakes and made investments in more than 50 countries on six continents.
- Abu Dhabi Development Holding Company (US$79 billion), known as ADQ, has made investments across Abu Dhabi’s economy, including energy and healthcare. ADQ was formed in 2018.
- Emirates Investment Authority, or EIA (US$78 billion). Established in 2007, EIA has made investments in many regional entities, as well as worldwide. Two of its most important investments are significant holdings in Etisalat and Du, both key telecommunications companies in the Middle East and North African regions.
Well-Known Investment Firms are Rapidly Establishing Footholds in the UAE
We note below recent hedge funds additions/relocation announcements related to operating in Dubai:
Millenium Management LLC, the giant hedge fund with more US$56 billion in assets, has about 30 employees headquartered in Dubai after securing a license with the DIFC in 2020. On its website, the money manager lists Dubai as one of its 15 key offices worldwide. As part of its efforts to expand its emerging market operations there, Millenium recently hired Dean Cooper from UBS; Mr. Cooper plans to move to the most populous city in the UAE from London.
In June 2022, an even bigger hedge fund, ExodusPoint Capital Management registered in the DIFC. ExodusPoint has about US$116 billion in AUM.
BlueCrest Capital Management (~US$87 billion in AUM) should soon have about ten employees located in Dubai, including three portfolio managers. Furthermore, the firm recently hired Citadel portfolio manager Chris Wheeler to spearhead its efforts there.
In March 2022, All Blue Capital, a global investment firm ($5.7 billion in AUM) that specializes in private equity, real estate and blockchain, announced the relocation of its corporate headquarters to the DIFC from London. Perhaps 30 of All Blue’s 80 employees could be based in Dubai by year-end 2022.
Carrhae Capital, a US$800 million London-based equity hedge fund, reportedly is seeking regulatory approval to open an office in Dubai. Two investment professionals are expected to relocate to the UAE hub from London.
LMR Partners, a UK-based investment firm, reportedly opened an office in the DIFC in April 2022.
CVC, a global alternative investment manager with 125 billion euros of assets; HPS Investment Partners (~US$86 billion of AUM); and Florin Court Capital, a London-based quantitative hedge fund, all opened offices in the UAE in 2021.
In February 2022, Apollo Global Management, Inc. (NYSE: APO), a global alternative asset manager with more than $500 billion under management, and Mubadala Investment Company, a UAE sovereign wealth fund (see above), expanded their global partnership.
Steve Cohen’s Point72 Asset Management, L.P., the multi-strategy hedge fund Verition Fund Management LLC, and the UK’s Brevan Howard Asset Management LLP, a US$10+ billion macro-oriented hedge fund, are all reportedly considering whether to diversify their operations to the UAE.
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