ADGM, the international financial centre (IFC) of the UAE’s capital, continues its impressive growth trajectory, reporting exceptional performance in the first half of 2024. As the fastest-growing financial centre and the only jurisdiction with the direct application of the English Common Law in the region, ADGM’s consistent achievements and strategic initiatives are a catalyst to the growth of Abu Dhabi’s financial sector growth.
The momentum of ADGM bolsters the financial sector’s contribution to Abu Dhabi’s non-oil economy, which grew to 9.7% in Q1 2024. ADGM is increasingly becoming a global magnet for asset management firms, outstanding talent, and investments, and is a cornerstone in cementing Abu Dhabi’s position as the ‘Capital of Capital’.
Commenting on ADGM’s continued growth and strong performance, H.E. Ahmed Jasim Al Zaabi, Chairman of ADGM said, “As a catalyst for Abu Dhabi’s financial sector, ADGM’s remarkable growth in the first half of 2024 fosters Abu Dhabi’s position as a premiere hub and a destination of choice for global, regional and local corporations and financial institutions. ADGM’s strategies have been aligned with Abu Dhabi’s visionary leadership to position the UAE’s capital as a leading international financial centre. Through the establishment of a thriving ecosystem and our pursuit of innovation, excellence, and strategic development, we are proud to have propelled towards the exceptional success of realising the ADGM Growth Strategy 2023-2027 targets, underscoring the accelerated growth of Abu Dhabi’s financial industry.”
He added, “ADGM’s contribution to Abu Dhabi’s stature as a global financial powerhouse and its sustainable economic growth will continue to capitalise on opportunities that will further elevate Abu Dhabi’s Falcon Economy to unprecedented heights throughout this exceptionally successful year and beyond.”
Surge in Operational Entities and New Licences Reflect Strong Growth
One of the factors that has supported ADGM’s strong growth in H1 2024 is the significant increase in operational entities, which have risen to 2,088, including 231 financial services entities – a 31% increase in operational entities compared to H1 2023. This growth is also complemented by the number of Financial Services Permissions (FSP) granted in the first six months, equivalent to 42 – a growth of over 90% compared to the June 2023 numbers which stood at 22.
Moreover, the number of licences issued at the end of June 2024 showcased 1,271 new licences – 20.5% more licences than a year earlier.
Financial Services Sector Led by Asset Management Positions Abu Dhabi as the Region’s Financial Hub
The asset management sector within ADGM continues to thrive, with a notable surge in AUM, global asset managers, firms and funds being anchored. In the first six months of 2024, AUM grew by 226% compared to the same period last year. By the end of June 2024, the number of fund and asset managers operating in ADGM reached 112, managing 141 funds.
Some of the major names within the asset management sector that have been granted an FSP include AXA IM, Eiffel Investment ME, GQG Partners, SS&C Financial Services, and Morgan Stanley. Furthermore, several entities within this space have also received their In-Principle Approval (IPA) including Aspen Digital, Blantyre Capital, Blue Owl, Fiera Capital, Infini Capital, I Squared Capital, Ninety One Gulf Capital, Peninsula, Token Bay Capital, Triton, and Vizier. The pipeline of entities within the asset management sector remains strong across hedge funds, private equity, institutional funds and venture capital firms set to be anchored in ADGM.
While asset management continues to lead the growth of ADGM, additional financial services entities across banking, payment services, wealth management and insurance sectors have also joined the ADGM ecosystem by receiving either an FSP or an IPA. The list of granted FSPs within these sectors includes Barrenjoey, Deutsche Bank AG, Fidelis OPCO, Laser Digital, and Paxos Issuance MENA. Prominent list of names that received an IPA includes Oyster Reinsurance Brokers, and SMBC Bank International, among others.
In May 2024, ADGM hosted the second edition of the UAE-France Investors Meetup – an exclusive gathering, led by His Excellency Bruno Le Maire, the French Minister of Economy, Finance, and Industrial and Digital Sovereignty and attended by 24 French Asset Management firms with USD 1.6 Trillion AUM. The Meetup represented a unique opportunity for stakeholders in both countries to forge strategic alliances, identify new opportunities, and drive mutual growth. It reaffirmed Abu Dhabi’s position as a global financial hub and underscored the enduring strength of the Franco-Emirati partnership.
Bringing Abu Dhabi to the World: International Roadshows Meet Unprecedented Demand
In its efforts to continue expanding its international positioning, ADGM conducted a series of roadshows in the first half of 2024, covering multiple countries and regions including the USA, Europe, Hong Kong and the Chinese subcontinent.
In the USA, ADGM engaged in over 40 bilateral discussions with hedge funds, private equity funds, and venture capital firms at the iConnections Global Alts 2024. In Europe, ADGM held over 100 bilateral discussions with senior leaders in the Private Banking, Wealth Management, Private Equity, VC and Hedge Fund sectors in France, Switzerland, and other European hubs. These engagements occurred amidst the surge of global wealth into the UAE and included participation in renowned international events such as the 2024 IIF European Summit in Paris and the JP Morgan Global Markets Conference.
The roadshow in China and Hong Kong concluded successfully, with strategic meetings involving 75 entities. Discussions focused on cross-border regulatory cooperation with the Hong Kong Monetary Authority, expansion plans for several Hong Kong and Chinese firms in Abu Dhabi, and the enhancement of liquidity strategies in both regions. The engagement also featured the ADIO-organised Shanghai Investment Summit, where the announcement of a new trade forum – ‘The UAE-China Summit presented by HSBC’ – was announced. This summit is set to be a sub-event of the upcoming Abu Dhabi Finance Week (ADFW) in December.
Leading the Path for Sustainable Finance and ESG in the Region
Following the introduction of the region’s first comprehensive Sustainable Finance framework in 2023, the Registration Authority (RA) and the Financial Services Regulatory Authority (FSRA) of ADGM have proposed enhancements to these regulations. A discussion paper published in May 2024 invited input from industry experts including fund managers, asset managers and companies subject to the Companies Regulations 2020. These proposed enhancements provide greater clarity around the FSRA’s requirements for ESG-labelled investment products that pursue broader sustainability objectives than only environmental. It also fosters demand for “green” products and services by aiming to provide investors with confidence that the risk of greenwashing has been addressed. Additionally, the consultation paper invites discussions around ADGM’s role in encouraging ADGM-based entities to identify and address climate-related risks to their businesses and develop their net-zero transition plans that support the UAE’s Net Zero by 2050 Strategic Initiative.
The RA of ADGM has also taken several initiatives in its efforts towards promoting best practices in ESG in the first six months of 2024. It has successfully launched the ESG Disclosures Framework micropage as well as an ESG Questionnaire Survey to understand the preparedness of ADGM-licensed entities for the framework.
ADGM at the Forefront of Blockchain Innovation
Following the introduction of the Distributed Ledger Technology (DLT) Foundations Regulations, ADGM has signed strategic partnerships with a couple of organisations in 2024. The first one was with the Solana Foundation, a non-profit organisation dedicated to decentralisation, adoption, and security on the Solana network to enhance DLT solutions and advance blockchain innovation. Another Memorandum of Understanding (MoU) was signed between ADGM and Hacken, a global leader in blockchain security auditing to collaboratively set new benchmarks for blockchain security and compliance as well as on-chain monitoring solutions in relation to ADGM’s DLT Foundations framework, positioning both organisations at the forefront of fostering a secure blockchain ecosystem.
These initiatives align with ADGM’s strategic vision of becoming a central hub for technology-driven financial services.
ADGM’s Workforce Booms Amid Abu Dhabi’s Growing Appeal with more than 2,500 New Jobs
Sustained investments across various sectors in Abu Dhabi have led to a strong performance in the Global Liveability Index 2024 published by the Economist Intelligence Unit. Abu Dhabi is the highest-ranked city in the MENA region, This ranking highlights Abu Dhabi’s strengths in factors such as stability, infrastructure and education.
ADGM is further enhancing its attractiveness as a preferred destination for professionals and investors alike. The workforce within ADGM’s Al Maryah Island has increased by more than 2,500 individuals, compared to the end of June 2023, and are now part of ADGM’s vibrant community.
Furthermore, the workforce number is expected to maintain strong growth in 2024 in line with the positive responses received from a comprehensive outlook survey conducted in the first half. A total of 70.81% of companies anticipate expanding their workforce in ADGM during 2024, with 29.93% expecting significant increases and 40.88% planning moderate growth in staffing.
ADGM’s Al Reem Island Expansion Fuels a Residential Surge
Since the announcement of the expansion in April 2023, Al Reem Island has seen the introduction of 1,266 new residential units, bringing the total to 21,335 units. The growth in occupancy rates has remained steady, rising from 84.78% in March 2023 to 92.82% by the end of June 2024. Moreover, with ADGM’s exceptional growth, many employees of the new companies established within ADGM’s jurisdiction are choosing Al Reem Island as their place of residence. ADGM’s jurisdiction over both Al Maryah and Al Reem Island highlights its exceptional qualities, making it an ideal location to live, work, and conduct business.
ADGM Pioneers Seamless Business Migration in Al Reem Island
The first half of 2024 marks a significant phase in ADGM’s Al Reem Island transition post-expansion and brings forward various factors that are facilitating this process. Several initiatives, along with periodic awareness activities, have been conducted. A recent initiative includes revisions to ADGM’s licensing fee schedule, aligning with the transitional arrangements to Al Reem Island. Major reductions of 50 per cent and more to obtaining non-financial and retail licences within ADGM’s jurisdiction will take effect from 1st January 2025.
In addition to regulatory amendments supporting existing Al Reem Island businesses, ADGM has launched an information centre in Shams Boutik Mall and organised two community events in 2024, one in March and another in July. These initiatives were implemented to engage with the Al Reem Island business community, provide essential updates on licensing, registration fees, and transition processes as well as foster interactive dialogue and collaboration among stakeholders. ADGM also introduced an incentive initiative for existing non-financial and retail businesses on Al Reem Island, exempting them from paying any fees for obtaining an ADGM commercial licence providing they apply before 31st October 2024.
These initiatives are ensuring a seamless transition for Al Reem Island businesses and have been well received by the business community.
ADGM Academy’s Initiatives Paving Career Paths for 1020 Emiratis in H1 2024
The knowledge arm of the IFC, ADGM Academy (ADGMA), has been strategically contributing towards the UAE’s National Agenda by partnering with leading players from various sectors.
Since its inception, ADGMA has achieved 98% employment placement of 3629 Emirati Nationals within the Private Sector through its National Development Agenda.
In the first half of 2024, ADGMA strategic collaborations and initiatives have supported the training and placement of 1020 Emirati nationals in professional job profiles across various companies in the UAE. Moreover, ADGMA signed numerous regional and international Memorandums of Understanding (MoU), to establish strategic partnerships and focus on developing Abu Dhabi’s knowledge economy. Some of the recent important collaborations signed by ADGMA at a federal level for the advancement of financial literacy include an MoU with the Emirates Foundation in the presence of H.H. Shaikh Theyab bin Mohamed bin Zayed, and an MoU with the GPSSA targeting the training of 10,000 current and soon-to-retire Federal employees across the UAE.
Since its launch in 2023, ADGMA’s Research Centre has been marching ahead by conducting strategic research and successfully published four groundbreaking articles covering the areas of Fintech, Digital Transformation, Quantum Computing and AI in the first half of 2024.
