Dubai hits target in wealth management ambitions

The bright lights of Dubai are attracting some of the biggest names in global finance. (Shutterstock)
Updated 09 September 2018
0

Dubai hits target in wealth management ambitions

  • Dubai is fast becoming a global center for wealth management, according to new figures from the emirate’s financial hub.
  • Fidelity International, the Bermuda-based investment management group, announced it too was to set up in the DIFC

The Dubai International Financial Center on Sunday announced it had passed a landmark of 200 firms in the fast-growing wealth and asset management sector that had chosen to be based in the center, a rise of 6 percent from the halfway point last year. Some 13 of the top 25 firms in the wealth management sector are included in that total.

The number of financial funds under management by DIFC entities has leapt by 240 percent in the same period, from 25 to the latest figure of 60, making it the largest funds domicile in the region, the DIFC said. 

Arif Amiri, chief executive of DIFC, said: “The wealth and asset management sector is a cornerstone of a thriving financial services industry, and as the DIFC has developed into a top global financial center, it has become one of our hallmarks. Major financial institutions see Dubai and the DIFC as a preferred platform to access investment opportunities and sources of investment across regional and global markets.

“To date, the center has seen consistent and significant growth in this field, reflecting the industry’s ongoing confidence in Dubai and the DIFC. We expect to see this growth continue as we introduce new regulations to our attractive legislative and business environment in line with our ambitious 2024 Strategy. Our flexible structures, which also benefit private wealth management and family trusts, continue to give us the edge,” he added.

The DIFC is committed to a ten-year strategy of trebling in size by 2024 in terms of the number of member firms and employees as well as the value of assets under management.

In the first half of 2018, the DIFC attracted three of the biggest names in global finance, Chinese firm Everbright Group and American giants State Street Global Advisers and Berkshire Hathaway Specialty Insurance.

 

 Last month, Fidelity International, the Bermuda-based investment management group, announced it too was to set up in the DIFC.

“These companies benefit from three types of fund structures, as well as tried-and-tested special-purpose companies and insurance special-purpose vehicles, used in structured financing transactions or related to entities of substance. The DIFC’s international-standard regulatory framework and flexible business environment are already paying dividends to global and regional companies within the Center’s community,” the center said.

In total, the DIFC reported a 17 percent rise in new financial institutions registering in the first half of the year, bringing the total to 2,003 with a combined workforce of nearly 23,000.

That period coincided with the decline of Abraaj Capital, the private equity fund manager that has been at the heart of the DIFC since it opened in 2004, but which was ultimately owned by a Cayman Islands holding company.

Financial and legal experts believe there will be no significant damage to Dubai from the Abraaj affair. Habib Al Mulla, one of the UAE’s leading corporate lawyers, told Arab News recently: “I don’t believe Dubai’s reputation has been damaged. The DIFC entity is not involved. There are various Abraaj entities which are subject of different jurisdictions.”

Nigel Sillitoe, chief executive of market research group Insight Discovery, which specializes in wealth and asset management sectors, said: “In the past quarter our company has received more requests than ever to support asset management companies within the DIFC.

“The recent woes at Abraaj did make us think that business might slow down but so far we haven’t seen any impact.” 

The center enacted two new laws in March: The trust law, which provides an appropriate environment for the operation of trusts in the DIFC, and the foundations law, a new regime to provide greater certainty and flexibility for private wealth management and charitable institutions.

Decoder

FASTFACTS

FASTFACT

The DIFC reported a 17 percent rise in new financial institutions registering in the first half of the year, bringing the total to 2,003 with a combined workforce of nearly 23,000.


Lebanon president: negative rumors about the economy harm country

Updated 19 September 2018
0

Lebanon president: negative rumors about the economy harm country

  • Lebanon has been without a government for four months since a national election
  • “The Lebanese pound is not in danger and Lebanon is not on the road to bankruptcy," Aoun said

BEIRUT: Lebanon’s currency is not in danger and rumors about the economy are causing harm, President Michel Aoun said on Wednesday, amid concern that a political deadlock has blocked urgent reforms and left the heavily indebted country vulnerable.
Lebanon has been without a government for four months since a national election. The central bank has issued repeated assurances about the soundness of the Lebanese pound’s peg to the dollar and the size of its foreign currency reserves, in response to speculation over the currency’s future.
“The Lebanese pound is not in danger and Lebanon is not on the road to bankruptcy. The economic situation is difficult but the things being spread as rumors are harming Lebanon,” Aoun said, in comments published by his office.
“We do not deny that there is a crisis,” Aoun said, but added that the country was working to address it.
Lebanon had the world’s third highest debt-to-GDP ratio, at over 150 percent, at the end of 2017. The International Monetary Fund wants to see immediate and substantial fiscal adjustment to improve debt sustainability.
The failure of politicians to form a government needed to undertake the necessary reforms following the parliamentary election in May has added to concern for the economy.
Leaders from across the political spectrum have in recent months said the political stalemate is harming the economy and a government needs to be formed. Parliament Speaker Nabih Berri this month said the country was in “intensive care” and the economic situation was “very dangerous.”
While politicians have stopped short of saying the peg is in danger, some economic analysts abroad have been considering the possibility of a devaluation.
“Lebanon’s ongoing political stalemate has renewed market concerns over the country’s frail balance sheets which could propel the government to devalue the Lebanese Pound ... Under this scenario, the authorities would find it increasingly challenging to service their large foreign currency debts,” Japan’s MUFG Bank said in a report on Wednesday.