Abu Dhabi Global Market fastest growing financial centre in MENA region for consecutive year

Abu Dhabi Global Market (ADGM) has declared 2023 as a year of success for the international financial centre of the UAE’s capital, highlighting its performance as the fastest-growing financial centre in the region for two consecutive years, as well as Abu Dhabi’s rise as a globally recognised financial hub.

ADGM had a strong start to 2023, building on the significant growth demonstrated in 2022 along with a positive outlook for the year ahead. This was underscored by the 2023 quarterly and half-yearly growth numbers across every aspect, setting it up to become another record-breaking year in ADGM’s eight-year operational journey.

Following its growth trend from 2022, ADGM’s asset management sector started strong in 2023 and ended even stronger as it continued to experience an unprecedented influx of global asset managers establishing their operations in the IFC.

Assets Under Management (AUM) as of 31 December 2023, showcased a year-on-year increase of 35 per cent when compared to the year-end number reported in 2022. Numerous investment firms and hedge funds were set up within ADGM as recorded in the year-end data; with the total asset managers operating in ADGM reaching 102 who are managing 141 funds. A major facilitator for these surged figures was the announcement of enhancements to the ADGM Financial Services Regulatory Authority’s (FSRA’s) regulatory framework that enabled ADGM-based collective investment funds to invest in credit by originating and participating in credit facilities through its Private Credit Fund framework.

Emerging as a preferred destination for businesses across borders, ADGM has witnessed major global and regional giants within the sector establishing themselves in ADGM in 2023. Operational entities jumped to 1,825, a growth of 32 per cent against 2022 figures (1,378 operational entities in 2022). There are over 125 firms that are already in the pipeline to be registered with ADGM. Some of the names worth highlighting include Brevan Howard, Ardian, Goldman Sachs, Tikehau Capital, Blackstone, SBI Capital, Asian Infrastructure Investment Bank (AIIB), Apollo, Fifth Wall, Fidera and Vibrant Capital. These also include renowned local and regional entities such as ADQ, Chimera, G42, Gulf Capital, OneIM and Investcorp to name a few.

The end of 2023 numbers also reflect 88 financial institutions and two exchanges that have received In-Principle Approvals (IPA) from ADGM. Of those IPAs, a significant number are part of the asset management sector. Due to the number of asset management firms moving to ADGM, leading Asset and Fund Service Providers such as Fund Accounting and Fund Administration service providers are banking on the opportunity ADGM is unlocking.

This growth is substantiated by the increase in ADGM’s workforce which has climbed to 13,394 – a 22 per cent rise in one year. Several global financial institutions and investment banks based within ADGM such as JP Morgan and BNP Paribas among others are expanding their service and product offerings as well as growing their teams to improve capabilities, standing as a testament to the talent growth being achieved within the IFC.

His Excellency Ahmed Al Jasim Al Zaabi, Chairman of ADGM, said: “After a year into Abu Dhabi’s Falcon Economy and a year of exceptional growth for Abu Dhabi Global Market. when we think of these factors together, it leads us to the realisation of what consistency, persistence and alignment to economic goals can achieve. In merely eight years, we have become one of the world’s largest financial districts and the fastest-growing international financial centre in the region, for two years consecutively.

“Enhancing Abu Dhabi’s international standing as the capital of capital, ADGM has truly realised the capital city’s potential for the financial landscape and strategically unlocked opportunities within underlying sectors. The growth that we are witnessing today is the realisation of the visions of the UAE’s leadership. We remain strongly positive as we move forward into 2024.”

ADGM's alignment with Abu Dhabi’s goals to drive the engine of sustainable economic diversification with the growing financial sector and ADGM Growth Strategy 2023-2027 has shaped the overall global positioning of the IFC. It is in the final stages of declaring its outlook for 2024 based on the visions of the leadership and strategy devised to deliver another milestone year.

The 2023 edition of Abu Dhabi Finance Week (ADFW) raised the bar for finance events in the region, by introducing the best of the best from across the globe through its platform. The event successfully hosted more than 18,000 attendees, featuring five main forums that encompassed 46 sub-events, 180 sessions and 300 international, regional and local speakers from diverse backgrounds. Thirty-nine per cent of the attendees represented global participants from over 100 countries.

International icons of the financial industry such as Jamie Dimon, Chairman and Chief Executive Officer of JP Morgan and Ray Dalio, Founder, Co-Chairman and Co-Chief Investment Officer, of Bridgewater Associates spoke of the rise of Abu Dhabi as a global finance centre during ADFW.

Marked as the most successful week in ADGM’s history, a total of 23 market announcements were recorded during Abu Dhabi Finance Week, including major operational upgrades by The World Bank and JP Morgan, along with a strong line-up of emerging financial institutions ranging across fintech and sustainable finance. Fourteen of the 23 market announcements, demonstrating major financial institutions representing a total AUM of US$452 billion have committed to establishing new operations in ADGM. Some of the key announcements of the establishment of enhanced presence include USD 144 billion Asset Manager NinetyOne, Independent Financial Services Group Rothschild & Co, US$105 billion Asset Manager GQG Partners, USD 60 billion Hedge Fund TCI and Social Trading Platform eToro.

With the Year of Sustainability in 2023 continuing into 2024 and the conclusion of the first-ever COP28 hosted in the UAE, ADGM took multiple initiatives that promoted sustainable finance and were seamlessly aligned with the sustainability goals of Abu Dhabi and the nation.

In the first half of 2023, ADGM introduced the region’s first comprehensive regulatory framework for sustainable finance, encompassing the region's most extensive sustainability-related disclosure requirements for relevant entities within ADGM and regulations for funds, discretionary managed portfolios, bonds and sukuks designed to accelerate the transition of the UAE to net zero greenhouse gas emissions.

Right before COP28 UAE, the UAE Sustainable Finance Working Group (SFWG) chaired by ADGM, published its third public statement emphasising three pivotal objectives of the UAE’s SFWG, namely, enhancing sustainability-focused corporate governance, bolstering transparency in sustainability reporting, and formulating a sustainable finance taxonomy specific to the UAE.

In its build-up to COP28 UAE, ADGM was announced as the designated Principal Climate Finance Partner of COP28 UAE. The IFC also hosted its flagship Abu Dhabi Sustainable Finance Forum (ADSFF) sixth edition at COP28 UAE this year, exploring efforts of Building Green Financial Centres of the Future.

Another announcement at COP28 UAE, ADGM became home to the Global Climate Finance Centre (GCFC), which will accelerate the development of climate finance frameworks and skills, and champion best practices in the UAE and globally. ADGM will be supporting GCFC's goals of addressing key barriers linked to financial frameworks that hinder investment flows as well as making climate finance available, affordable, and accessible.

The establishment of GCFC coincided with another climate finance development, the launch of ALTÉRRA at ADGM, a US$30 billion catalytic climate vehicle that will drive forward international efforts to create a fairer climate finance system with an emphasis on improving access to funding for the Global South. ALTÉRRA’s recent announcement in 2024 also highlighted the aim to mobilise US$250 billion of institutional investment by 2030 to finance climate solutions at a global scale.

Last year, 28 new signatories signed the Abu Dhabi Sustainable Finance Declaration, an initiative led by ADGM, bringing the total count of committed signatories to 145.

ADGM expanded tenfold by bringing Al Reem Island under its jurisdiction in May 2023, making it one of the world’s largest International Financial Districts with a geographic area of 14.38 million sqm. ADGM also launched its inaugural Money Laundering and Terrorist Financing (ML/TF) Risk Assessment of ADGM Legal Persons and Arrangements Report (LPA Report) in May 2023.

ADGM launched Numou, a digital platform tailored to bridge the funding gap faced by SMEs in collaboration with Al Maryah Community Bank, RAKBANK, Commercial Bank International, CredibleX and Khalifa Fund who collectively plan to commit and extend lending of up to AED220 million.

ADGM RA issued an updated version of the Beneficial Ownership and Control Regulations 2022 (‘BOC Regulations’) which repealed and replaced the existing Beneficial Ownership and Control Regulations 2018. ADGM FSRA announced revisions to its Anti-Money Laundering and Sanctions Rules and Guidance (the AML Rulebook).

The Registration Authority (RA) of ADGM published the legislative framework for Distributed Ledger Technology (DLT) Foundations. ADGM Arbitration Centre launched ODR@ADGM, an online dispute resolution platform that hosts a fully digitalised settlement and mediation service.

ADGM Academy (ADGMA) achieved the milestone of more than 1,000 UAE Nationals being trained, upskilled and reskilled in the job placement. This includes more than 500 candidates who graduated from the National Development Program (NDP) and have been employed in the private sector.

Under the ADGMA Entrepreneurship Program, more than 300 candidates were enrolled, and the first international Student Challenge was presented in SIBOS.

In its efforts towards local and global collaborations, ADGMA signed 82 strategic partnership agreements which include 2 international partnerships and 5 partnerships for research and innovation. It also inked 19 Memorandums of Understanding (MoU) to explore future alliances with both academic and corporate entities.