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November 29, 2023

Abu Dhabi’s ascension: hedge funds invest as UAE cements reputation as global hotspot

Brevan Howard has announced an Abu Dhabi expansion – days after TCI confirmed a new office in the growing hedge fund hub

By Stephanie Bridger-Linning

Brevan Howard has announced it will double its Abu Dhabi headcount by spring 2024, as the UAE continues to cement its position as a global hedge fund hotspot.

Speaking at Abu Dhabi Finance Week on Tuesday, fund co-founder Alan Howard said the team will grow by 60 to 120 by the end of Q1 2024. The firm opened its Abu Dhabi office earlier this year.

‘Hedge funds sit at the top of the food chain,’ Howard said, according to AGBI. ‘As you get more top hedge funds with their top senior people coming here, that can lead to the banks having to send their best people as well to service correctly those traders, and other parts of the financial sector, as well as ancillary services such as compliance [and] legal, which are more in a ratio of four to one.’

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[See also: Dubai swoops for London hedge fund traders]

It comes days after TCI, founded by philanthropist and activist investor Sir Chris Hohn, announced it will open an Abu Dhabi office.

Sir Chris, who appeared on the Spear’s Power List 2023, said of the move: ‘The Middle East is a vital market for the investment management industry from a talent and asset growth perspective, as well as a critical partner in global efforts to reduce carbon emissions and climate change.’

The TCI Abu Dhabi office will be headed up by Bronwyn Owen, TCI’s global head of investor relations, who has relocated from New York for the role. 

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Ray Dalio, whose Bridgewater Associates also set up an office in Abu Dhabi this year, told an audience at Abu Dhabi Finance Week that the region is ‘very very attractive’ to institutional investors and is at a ‘takeoff point’ in terms of future growth.

UAE: the new hedge fund hotspot

Although Abu Dhabi still trails behind Dubai, investment in the emirate is reflective of a regional trend.

The Dubai International Financial Centre (DIFC) announced yesterday that hedge funds are moving to the region in ‘unprecedented’ numbers. There were 40 hedge funds recorded in Dubai as of July, more than a third of which were registered in the previous 12 months. 

The DIFC’s regulator, the DFSA, has authorised a number of hedge funds in the last three months including Asia Research & Capital Management, Brevan Howard, Carrhae Capital, Cresen Capital, Lighthouse Partners, Merlyn Advisors, Noventa Capital Management and Qube Research & Technologies.

[See also: UAE family law is changing the game for British expats]

Industry leaders have identified the UAE’s zero income tax, advantageous location and ‘affluent’ lifestyle as factors luring hedge fund managers away from the traditional hubs of London and New York.

These practical benefits were highlighted by Howard, who described Abu Dhabi as ‘the best time zone in the world to trade macro than anywhere else’. He explained: ‘You can see the Bank of Japan or what’s going on in Asia at the beginning of the day, and at the end of the day you can see the Fed and what happens at a more reasonable time. That is an incredible advantage of Abu Dhabi.’

The UAE’s corporate tax rate of 9 per cent – introduced in June for the first time – remains far below fellow GCC states Saudi Arabia (20 per cent), Oman, Kuwait (both 15 per cent) and Qatar (10 per cent, with a 35 per cent tax rate for petroleum companies). Across the board, corporate tax rates in the GCC fall far below the global average of 23.4 per cent.

Dalio also stressed the importance of the political stability of the Gulf states, financial status and regulatory environment as crucial plus-points for institutional investors.  


Discover more with Spear’s: Diana Hamade: Meet UAE’s top family lawyer

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