The race between Dubai and Abu Dhabi to become the world’s leading financial hub is intensifying, as both cities strive to attract global wealth managers and high-net-worth individuals. While Dubai has long held the title of the Middle East’s financial capital, Abu Dhabi is making significant strides, leveraging its vast sovereign wealth and oil reserves to compete on the world stage.
Dubai, known for its low taxes, economic growth, and the application of English common law, ranks 16th in the Global Financial Centres Index, while Abu Dhabi is placed 35th. Despite Dubai’s lead, Abu Dhabi, which holds 90% of the UAE’s oil reserves, is accelerating efforts to diversify its economy, tapping into nearly $2 trillion in sovereign wealth to drive non-oil growth.
Abu Dhabi’s Growing Appeal
Abu Dhabi’s emergence as a key player in global finance has not gone unnoticed. Ryan Lemand, co-founder and CEO of Neovision Wealth Management, highlighted the influx of money managers and hedge funds flocking to the city. “It’s completely changed in the past year,” Lemand noted, pointing to a growing number of conferences attracting international investors eager to raise funds in the UAE’s capital.
This shift is reflected in rising company registrations and the growing presence of major financial players. Hedge fund giant Brevan Howard, along with asset managers like PGIM and Nuveen, are among the new arrivals in Abu Dhabi. Private equity firm General Atlantic is also set to join, having received preliminary approval to operate in the city’s financial centre, Abu Dhabi Global Market (ADGM).
Sovereign wealth funds are another major draw. Abu Dhabi boasts $1.7 trillion in sovereign wealth assets, dwarfing Dubai’s $500 billion. For investors, the proximity to these funds and the ease of obtaining licenses to operate provide significant incentives. “The regulatory environment is extremely favourable,” remarked Brandon Robinson, deputy head of private markets at JPMorgan Asset Management, at a recent conference.
Dubai Holds the Upper Hand
Despite Abu Dhabi’s momentum, Dubai remains a formidable competitor. The Dubai International Financial Centre (DIFC) is home to over 420 wealth and asset management firms, far outpacing Abu Dhabi’s 112 fund firms as of June. The city’s reputation as a financial hub is further bolstered by its vibrant entertainment scene, tourism, and property investment opportunities.
Dubai’s appeal goes beyond finance. Known for its luxury lifestyle, the city is home to the world’s tallest skyscraper, a bustling nightlife, and a plethora of high-end restaurants. For some investors, these features make Dubai a more attractive destination. One hedge fund professional described the DIFC as “buzzing,” reflecting the city’s dynamic financial district.
Crypto Industry Drives Competition
Both cities are also competing to become global centres for the burgeoning cryptocurrency industry. The UAE has been quick to position itself as a leader in the sector, with Dubai establishing a dedicated regulator for cryptocurrency in 2022. The United States, in contrast, lacks a national framework, and the European Union’s rules are only just coming into effect, giving the UAE a competitive edge.
Brevan Howard, one of the world’s leading hedge funds, has capitalized on this advantage, conducting a significant portion of its crypto trading from the UAE. Ryan Taylor, group head of compliance at the hedge fund, emphasized the country’s favourable regulatory environment for crypto businesses during the Alternative Investment Management (AIM) Summit in Dubai.
A Close Race for Financial Supremacy
As Abu Dhabi continues to build momentum and attract major financial players, Dubai remains the region’s dominant financial centre, thanks to its established infrastructure and international allure. However, with Abu Dhabi’s vast sovereign wealth and rapid diversification efforts, the race to become the Middle East’s leading financial hub is far from over. Both cities are working hard to lure global wealth managers, and the outcome will depend on their ability to maintain favourable regulations, attract new industries, and offer unique advantages to investors.
