UAE: Pros & Cons for Emerging Managers

Land of milk & honey or more nuanced?

Streets paved with Gold?

The migration statistics tell their own story - the post pandemic shift here by asset management talent, firms & capital dwarfs anything else, anywhere else.

But for all the many success stories there are very many aborted missions.

I'll try to unpack the key headlines in this letter.

By the way, Hi, I'm Simon, I help emerging funds arrive & thrive in the UAE whilst also offering international GP loving institutions a co-investment platform to diversify their portfolios into the Middle East.

Let's start with some data

Bearing in mind the total population of UAE is only c10mn pax...

Of which 90% are expat

400 wealth & asset management firms thrive in Dubai's financial freezone (DIFC)

$700bn AUM now in DIFC alone...

>70k millionaires in UAE

>200 centi millionaires in UAE

>15 billionaires (not including local families)

$3trn of private wealth within an hours flight

$4trn of Sovereign Wealth Fund (SWF) AUM in UAE alone ??

Abu Dhabi's financial freezone (ADGM) hosts 25 of the world's top 30 largest hedge funds & 6 in 10 of the largest family offices

45k professionals now work in DIFC

The Ritz Carlton hotel in DIFC has the highest occupancy of any RC property globally

2020-2023, 20% annualised increase in private wealth in UAE

65 hedge funds, 45 over a $1bn of AUM

Estimate of 5,000 fund salespeople travelling here for fact find missions every week

Let's start with the tailwinds

Strategic timezone

Moves fast as a benevolent autocracy

Open 24/7

Dubai DIFC, tried & tested, 20 years old, operates in English common law & offers it's own Fund hub made up of physical space and all service providers. One stop-shop.

Abu Dhabi ADGM very similar

Regulation is realistic & human. You can start with a rep office before you go regulated. They risk base your application and can fast track where necessary with open face to face comms throughout ?

Zero income tax

Low VAT

Longer term resident visas available

Top schools (prep, high and University)

The 6 S': Sea, Ski, Shop, Sip, Sports, Sights - all possible within UAE ?

Used to be just a SWF story here, now it’s a wealth story too ?

But what about the headwinds

There's really 1 great big fat one:

If you're not here you won't raise

Suitcase bankers and asset managers get nowhere

Commit to travelling here a few times a year & meeting the same people each time - won't work

Used to know some VIP SWF folks from your days at a wire house to tap into now - won't work with your start up fund

Private markets manager and no plans to develop a thesis to deploy capital here in the region - good luck with that

Tell people that if they allocate you'll open up here - you can imagine how that lands...

I figure it this way. If I want to really raise in Dublin, New York, London, San Francisco - I need to be there with some set up and boots on the ground. It's no different here except the prize, the fat carrot, the opportunity is a match for anywhere on the planet.

Oh and I nearly forgot, in the summer, it gets a little hot...

To conclude, if you're a private or public markets emerging fund, this place needs to be on your radar.

By all means do the fact find mission.

Then commit or don't commit, no middle ground.

We know lean, we understand you're watching the bank balance.

So.

A local rep office entity, banked with a full time hustling distribution person backing into your local service providers and friends will get you started. Make sure you've got a Cayman fund or reputable international portal for your new investors to access. And then make a whole load of noise about being here, every day, every week on LinkedIn, in the trade press, TV, & radio.

And DM me, we'll lean in too if you'd like. Here's some places to learn more about us: www.aucta.live and www.qahwa.fund

Thanks for reading, please do subscribe to this letter & all your likes & comments are read & responded to personally with not a bot in sight.

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