(Bloomberg) — Abu Dhabi has already drawn the likes of Brevan Howard Asset Management and Marshall Wace as it established itself as a burgeoning hub for hedge funds. Now, a new group of heavyweights are looking to join the mix.
Most Read from Bloomberg
Hillhouse Investment Management and CPE — the Chinese firm formerly known as Citic Private Equity — have held early-stage talks on setting up offices in Abu Dhabi, according to people familiar with the matter. A representative for the city’s financial freezone, ADGM, now expects two Chinese private equity firms to set up a base there shortly.
The moves show there’s a growing number of Asian investment outfits looking to join their western peers in the United Arab Emirates, where a bevy of deep-pocketed sovereign wealth funds, the country’s tax-free status and favorable time zones have helped cities like Abu Dhabi and Dubai become more serious competitors to financial hubs like London and Hong Kong.
“Abu Dhabi is absolutely nailing it,” Paul Marshall, Marshall Wace’s co-founder, said at the city’s annual financial confab this month, where he exhorted the city’s tax benefits and unveiled his firm’s newest office as one of the headline speakers. “It’s a very attractive place.”
Abu Dhabi isn’t alone in making overtures to investing firms.
Dubai’s financial regulator and the Alternative Investment Management Association recently co-hosted executives from Chinese wealth and asset management firms with the goal of getting some of them to expand to the region. Already, the hedge fund industry’s headcount in the city has topped 1,000 helped by firms like Millennium Management.
“Interest from Chinese companies has surged during 2024,” the Dubai International Financial Center said in a statement. At least two heavyweights have already set up in the emirate in recent months, including Dymon Asia Capital and Alp Ercil’s Asia Research & Capital Management.
The UAE has close ties to China, which has been its top trading partner since 2020. Asian firms looking to enter Dubai or Abu Dhabi are also hoping the cities will serve as a gateway for them to access nearby markets like India.
The country’s twin pools of capital are also an important part of the allure. Abu Dhabi is home to sovereign wealth funds that control close to $1.7 trillion and Dubai, 90 minutes away, houses family offices wielding $1.2 trillion.