ADGM's assets under management up 35% in first half as it attracts more businesses

A total of 102 asset managers have set up shop, with in-principle approvals to operate jumping 119% in the first six months of the year

Abu Dhabi Global Market is heavily supporting the growth and diversification of the falcon economy. Ruel Pableo / The National

The Abu Dhabi Global Market grew its assets under management by a record 35 per cent in the first half of 2023, underscoring its position as the region's fastest-growing financial hub.

A total of 102 asset managers, comprising investment firms and hedge funds, who manage 128 funds, set up shop in the capital’s financial centre during the six-month period.

In the six months through June, 46 international and regional companies were granted in-principle approval to operate within the ADGM, which is a 119 per cent jump compared to the year-ago period, and these firms are to be fully operational soon, ADGM said in a statement on Thursday.

“What we are witnessing in Abu Dhabi today, with some of the major global players choosing the capital city to base their business operations, is nothing short of a major transition that is supporting the growth and diversification of the falcon economy," Ahmed Al Zaabi, chairman of the Abu Dhabi Department of Economic Development and ADGM, said.

"We are excited to see the growth numbers of ADGM, which reinforces our position as the fastest-growing international financial centre in the region."

Abu Dhabi's economy has gone from strength to strength, and it has rolled out several programmes to attract market players from around the world to set up their businesses and take advantage of its entrepreneurial infrastructure and business-friendly regulations.

The UAE capital’s non-oil economy grew by 6.1 per cent annually in the first quarter of the year, with the sector's gross domestic product reaching the highest level in nine years, on the back of its strong diversification push, according to Statistics Centre Abu Dhabi.

The emirate's GDP exceeded Dh1.1 trillion ($299.5 billion) in 2022, an estimated 9.3 per cent growth over 2021, with the non-oil sector accounting for half of it, Mr Al Zaabi announced in May's Annual Investment Conference.

Abu Dhabi aims to increase its non-oil exports by 143 per cent to Dh178.8 billion by 2031, he said.

Meanwhile, AUMs in the GCC are projected to expand above the global average to hit about $500 billion in onshore assets by 2026, from $400 billion at the end of 2022, PwC unit Strategy& said in a report last month.

“Abu Dhabi and ADGM offer a transparent and business-friendly environment to the banking, FinTech and investment management industries. It is an important global hub with tremendous potential," said Alan Howard, founder of fund management firm Brevan Howard, which manages more than $30 billion of assets globally.

Other notable global firms that have made the ADGM their base in 2023 include the Asian Infrastructure Investment Bank (AIIB), Apollo, Ardian, Blackstone, Fidera, Fifth Wall, Goldman Sachs, Ray Dalio's family investment office, SBI Capital, Tikehau Capital and Vibrant Capital.

Earlier this year, the AIIB, a $100 billion multilateral development bank headquartered in Beijing, signed an agreement to open its first overseas office in the ADGM. It is slated to open on September 19.

The ADGM is also considered a preferred destination for local and regional firms, including Abu Dhabi holding company ADQ, Abu Dhabi artificial intelligence company G42, Chimera, Gulf Capital, OneIM and Investcorp.

“Abu Dhabi has become an international hub for investors, employers and employees alike ... [it] enable[s] us to pursue many of the exciting opportunities we see in this region and to propel the firm into the next stage of its journey," said Rajeev Misra, chief executive of OneIM.

During the first half of 2023, the ADGM’s Financial Services Regulatory Authority also began implementing its sustainable finance regulatory framework, comprising the region’s most comprehensive environmental, social and governance disclosure requirements.

It also rolled out a regulatory framework for funds, discretionary managed portfolios, bonds and sukuks that are designed to accelerate the transition of the UAE to net zero greenhouse gas emissions.

This complements the ADGM’s existing regulation of carbon offsets, facilitating the establishment of AirCarbon Exchange, the world’s first regulated carbon offsets exchange and clearing house in the ADGM.

Another milestone was its tenfold expansion of its geographic area, bringing Al Reem Island under its jurisdiction, in addition to the existing Al Maryah Island, positioning the ADGM as one of the largest financial districts in the world with an area of 14.38 million square metres.