Hedge Fund Influx Has #AbuDhabi Eyeing $16 Billion Expansion - Bloomberg

Hedge Fund Influx Has Abu Dhabi Eying $16 Billion Expansion - Bloomberg

After attracting the world’s biggest financial firms and thousands of professionals to its financial hub in recent years, Abu Dhabi is planning a $16 billion expansion to add more offices, luxury homes and retail space.

Sovereign wealth fund Mubadala Investment Co. and the city’s biggest developer Aldar Properties PJSC are partnering on the mixed-use development that will double the Grade A office space on Al Maryah Island, home to the ADGM financial center. Aldar will hold a 60% stake in the venture, which will add 3,000 luxury waterfront residences, along with retail and hospitality space, according to a statement Monday.

Buoyed by nearly $1.8 trillion in sovereign wealth, Abu Dhabi is fast catching up with neighboring Dubai as a hub for hedge funds and asset managers. In recent weeks, buyout giant KKR & Co. and Man Group Plc, the world’s largest publicly traded hedge fund, have announced plans to open offices in the city.

The investment banking unit of New York-based Cantor Fitzgerald LP and hedge fund giant Balyasny Asset Management joined the rush, as Abu Dhabi Finance Week kicked off on Monday. More firms are expected to unveil expansion plans during the annual confab.

In the third quarter, the number of operational entities within the ADGM rose to 3,227 — a 43% year-on-year increase — with nearly 12,000 active licenses now registered in the free zone. Its workforce has reached nearly 40,000.

To accommodate this influx, the emirate had extended ADGM’s jurisdiction to neighboring Al Reem Island but office space is tight. Some of ADGM’s most active firms are struggling to secure adequate facilities, as occupancy hit 97% earlier this year and rents continue to rise.

Billionaire Alan Howard said his hedge fund has run out of office space in the city, where it now employs 150 people. “We have a wait list for people who want to come, so we’re going to take more space here,” he said at Abu Dhabi Finance Week. Brevan Howard Asset Management, is the largest hedge fund operating in the emirate.

Abu Dhabi isn’t alone. Dubai is building three new towers in its financial district and retrofitting another for hedge-fund startups. Meanwhile, Riyadh’s financial hub is seeking funds for expansion, Bloomberg News has reported.

Mubadala and Aldar share a two-decade partnership, including multiple projects on Al Maryah Island. A unit of the $330 billion wealth fund is among Aldar Properties’ top shareholders.

Last week, Mubadala Capital — its asset management arm — and Aldar launched a real-assets investment platform targeting opportunities across the United Arab Emirates and broader Gulf region.