Dubai hits target in wealth management ambitions

The bright lights of Dubai are attracting some of the biggest names in global finance. (Shutterstock)
Updated 21 September 2018

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.

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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.


New emissions blow for VW as German court backs damages claims

Updated 26 May 2020

New emissions blow for VW as German court backs damages claims

  • Scandal has already cost firm more than €30 billion; ruling serves as template for about 60,000 cases

KARLSRUHE, Germany: Volkswagen must pay compensation to owners of vehicles with rigged diesel engines in Germany, a court ruled on Monday, dealing a fresh blow to the automaker almost 5 years after its emissions scandal erupted.

The ruling by Germany’s highest court for civil disputes, which will allow owners to return vehicles for a partial refund of the purchase price, serves as a template for about 60,000 lawsuits that are still pending with lower German courts.

Volkswagen admitted in September 2015 to cheating in emissions tests on diesel engines, a scandal which has already cost it more than €30 billion ($33 billion) in regulatory fines and vehicle refits, mostly in the US.

US authorities banned the affected cars after the cheat software was discovered, triggering claims for compensation.

But in Europe vehicles remained on the roads, leading Volkswagen to argue compensation claims there were without merit. European authorities instead forced the company to update its engine control software and fined it for fraud and administrative lapses.

Volkswagen said on Monday it would work urgently with motorists on an agreement that would see them hold on to the vehicles for a one-off compensation payment.

It did not give an estimate of how much the ruling by the German federal court, the Bundesgerichtshof (BGH), might cost it.

Volkswagen shares were 0.5 percent lower. The BGH’s presiding judge had signaled earlier this month he saw grounds for compensation.

Costs mount

“The verdict by the BGH draws a final line. It creates clarity on the BGH’s views on the underlying questions in the diesel proceedings for most of the 60,000 cases still pending,” Volkswagen said.

A lower court in the city of Koblenz had previously ruled the owner of a VW Sharan minivan had suffered pre-meditated damage, entitling him to reimbursement minus a discount for the mileage the motorist had already
benefited from.

The court at the time said he should be awarded €25,600 for the used-car purchase he made for €31,500 in 2014.

“We have in principle confirmed the verdict from the Koblenz upper regional court,” said BGH presiding federal judge Stephan Seiters.

Volkswagen had petitioned for the ruling to be quashed altogether by the higher court, while the plaintiff had appealed to have the deduction removed.

A Volkswagen spokesman said that outside Germany, more than 100,000 claims for damages were still pending, of which 90,000 cases were in Britain.

The carmaker also said it had paid out a total of €750 million to more than 200,000 separate claimants in Germany who had opted against individual claims and instead joined a class action lawsuit brought by a German consumer group.

The carmaker said last month it would set aside a total of 830 million for that deal.

In a separate court, Volkswagen agreed last week to pay €9 million to end proceedings against its chairman and chief executive, who were accused of withholding market-moving information before the emissions scandal came to light.