ABU DHABI: 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, and Abu Dhabi’s rise as a globally recognised financial hub.
The 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 the ADGM’s eight-year operational journey.
Region’s Strongest Financial Capital
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 31st December 2023, showcased a year-on-year increase of 35
percent when compared to the year-end number reported in 2022. Numerous investment firms and hedge funds were set up within the ADGM as recorded in the year-end data; with the total asset managers operating in the 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 the 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, the ADGM has witnessed major global and regional giants within the sector establishing themselves in the Market in 2023. Operational entities jumped to 1,825, a growth of 32 percent against 2022 figures (1,378 operational entities in 2022).
Some of the global names worth highlighting include Brevan Howard, Ardian, Goldman Sachs, Tikehau Capital, Blacksto
ne, 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. Furthermore, there are over 125 firms that are already in the pipeline to be registered with the ADGM.
The end of 2023 numbers also reflect 88 financial institutions and two exchanges that have received In-Principle Approvals (IPA) from the ADGM. Of those IPAs, a significant number are in the asset management sector. Due to the number of asset management firms moving to the ADGM, leading Asset and Fund Service Providers such as Fund Accounting and Fund Administration service providers are banking on the opportunity the ADGM is unlocking.
This growth is substantiated by the increase in the ADGM’s workforce, which has climbed to 13,394 – a 22 percent rise in one year. Several global financial institutions and investment banks based within the ADGM such as JP Morgan and
BNP Paribas among others are expanding their service and product offerings and growing their teams to improve capabilities, standing as a testament to the talent growth being achieved within the IFC.
Commenting on the ADGM’s year of success Ahmed Al Jasim Al Zaabi, Chairman of ADGM said, ‘A year into Abu Dhabi’s Falcon economy and a year of exceptional growth for the ADGM. 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.’
He added, ‘Enhancing Abu Dhabi’s international standing as the ‘capital of capital’, the 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.’
The 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 IFC’s overall global positioning. 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.
ADFW 2023 – Financial Titans rally to Abu Dhabi
The 2023 edition of Abu Dhabi Finance Week (ADFW) has 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. The global impact of the event stood quite high where 39 percent of the attendees represented global participants from ove
r 100 countries.
International icons of the financial industry such as Jamie Dimon, Chairman and CEO 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 the ADFW.
Marked as the most successful week in the 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 the ADGM. Some of the key announcements of the establishment of enhanced presence include $144 billion Asset Manager NinetyOne, Independent Financial Services Group Rothschild and Co, $105 billion Asset Manager GQG Partners, $60 billion He
dge Fund TCI, and Social Trading Platform eToro.
‘Year of Sustainability’ and COP28
With the ‘Year of Sustainability’ 2023 continuing into 2024 and the conclusion of the first-ever COP28 hosted in the UAE, the ADGM took multiple initiatives that promoted sustainable finance and were seamlessly aligned with Abu Dhabi’s and the nation’s sustainability goals.
In the first half of 2023, ADGM introduced the region’s first comprehensive regulatory framework for Sustainable Finance, encompassing the region’s most extensive ESG requirements for relevant entities within the 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, the UAE Sustainable Finance Working Group (SFWG), chaired by the ADGM, published its third public statement emphasising three pivotal objectives of the UAE’s SFWG namely, enhancing sustainability-focused corporate governance, bolstering transparency in sust
ainability reporting, and formulating a sustainable finance taxonomy specific to the UAE.
In its build-up to COP28, the ADGM was announced as the designated ‘Principal Climate Finance Partner’ of COP28. The IFC also hosted its flagship Abu Dhabi Sustainable Finance Forum (ADSFF) sixth edition at COP28 this year, deep-diving into efforts of ‘Building Green Financial Centres of the Future’.
Another milestone announcement at COP28 is the ADGM becoming home to the pioneering Global Climate Finance Centre (GCFC). This will accelerate the development of climate finance frameworks and skills, and champion best practices in the UAE and globally. The ADGM will support GCFC’s goals of addressing key barriers linked to financial frameworks that hinder investment flows and making climate finance available, affordable, and accessible.
The establishment of the GCFC coincided with another climate finance development, the launch of ALTÉRRA at the ADGM, a $30 billion catalytic climate vehicle that will drive forward intern
ational 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 $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 the ADGM, bringing the total count of committed signatories to 145.
Source: Emirates News Agency