Abu Dhabi is getting serious in its bid to lure the wealthy

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Bloomberg reported over the weekend that Abu Dhabi is “quietly orchestrating a fresh package of perks”, including country club memberships and elite school admissions, to lure “hedge fund titans” to the UAE capital.

If you’re an embryonic master of the universe, will your decision to set up an expensive flagship office really be determined by such a bauble as a free pass to a country club? I doubt it.

It may be the factor that tips the balance, I suppose, if you’re choosing a new HQ, other things being equal, but AD’s role as the richest emirate in the Gulf and home to some of the world’s biggest sovereign wealth funds is surely a much more decisive attraction.

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Bloomberg quoted an executive from the Abu Dhabi Global Market (ADGM), the emirate’s financial centre, to the effect that the capital is “benchmarking” itself against the likes of Singapore and Hong Kong, and it is true that those Asian financial centres are facing their own competitive challenges from geopolitical, economic and demographic pressures.

AD can undoubtedly put up a convincing case for housing your headquarters, rather than Chinese Communist Party-dominated Hong Kong or crowded, expensive Singapore.

But what the Bloomberg article only vaguely touched on is the fact that there are two other competing hubs in the neighbourhood: Dubai, an hour away by car, and Riyadh, easily accessed via short, regular flights from AD. 

For those thinking of Riyadh, a country club pass is one more box to tick in the “lifestyle” column. Despite the enormous changes in the kingdom, there is still the perception that the capital lacks the comforts of an expatriate lifestyle. The school offering by AD will certainly make the financial titans think seriously, compared to Saudi Arabia.

But the more serious competition is with Dubai. Policymakers from the two UAE financial hubs avoid the word “rivalry”, preferring instead the formula that “competition is healthy”, and there is enough business, actual and potential, to satisfy both of them.

Nonetheless, there is a lively spirit of friendly contention between them, and this I suspect is the real reason for the country club and schools bait.

There are subtle, but distinct differences between ADGM and the Dubai International Financial Centre that shape their competing attractions.

DIFC has been going full throttle since 2004, in which time it has become the “Middle East’s de facto business and financial hub”, according to Bloomberg.

It has overcome the challenges of the Global Financial Crisis of 2008 and the Covid recession. It recently celebrated its first two decades with the best revenue figures in its history. Reflecting its glitzy home emirate, it has also become a leisure and cultural destination in its own right, as a night-time stroll through Gate Village will confirm.

ADGM, again in tune with its more venerable home, traditionally adopted a more cautious growth strategy, but of late has been quick to seize opportunities for expansion when they have arisen.

Last year, it took a giant step forward by incorporating the neighbouring Reem Island into its financial free zone, dramatically increasing its jurisdiction at a stroke, and in the process justifying its own description as the “fastest growing international financial center” in the region.

Beyond the dubious pull of country club membership, there does seem to be a newly ambitious spirit about ADGM in its drive to attract global movers and shakers to the emirate. It has paid off to some extent, and there will probably be more to come. 

The likes of Goldman Sachs, Rothschild and Morgan Stanley are among those setting up in ADGM. It should be pointed out, however, that those three have been in Dubai for years, probably paying their own country club fees from the big revenues they generate there.

It may be churlish of AD to point out that the capital enjoys a distinct advantage in terms of cost of living compared to Dubai, across a range of important categories like accommodation rental, utilities, and education – but maybe a “hedge fund titan” of the calibre AD is trying to attract will not particularly notice that anyway.

Frank Kane is Editor-at-Large of AGBI and an award-winning business journalist. He acts as a consultant to the Ministry of Energy of Saudi Arabia and is a media adviser to First Abu Dhabi Bank of the UAE