ABU DHABI (The Thursday Times) — Abu Dhabi, the capital of the United Arab Emirates (UAE), has been officially crowned the “Capital of Capital,” managing an astounding US$1.7 trillion in assets through its Sovereign Wealth Funds (SWFs) as of October 2024. This staggering figure, announced in a recent report by Global SWF, firmly places Abu Dhabi at the top of the global financial landscape, ahead of other prominent contenders like Oslo, Beijing, and Riyadh.
However, this impressive figure doesn’t include the substantial US$344 billion managed by Abu Dhabi’s Royal Private Offices (RPOs), nor does it account for the 3,107 SWF employees—the largest workforce of its kind in any city worldwide. Abu Dhabi’s commanding presence in the global wealth management sector is undeniable, yet the city’s strategy extends beyond merely accumulating wealth. It’s about sustainable growth, diversification, and positioning itself as a magnet for global talent and investment.
While Abu Dhabi leads in the realm of SWFs, it’s essential to note that Dubai still holds the title for the richest residents in the region. Dubai is home to 72,500 individuals with at least $1 million or more in investable assets, making it one of the wealthiest cities globally in terms of resident wealth.
Abu Dhabi’s journey to wealth supremacy
Abu Dhabi’s story of wealth and financial power is deeply rooted in its discovery of oil. In 1958, the emirate struck oil, setting in motion a transformative journey. By 1976, the Abu Dhabi Investment Authority (ADIA) was established, marking the beginning of the emirate’s reign as a global financial powerhouse. What started as careful investment of oil revenues has now evolved into a diversified economy with stakes in numerous industries around the world.
The city’s financial strategy revolves around more than just holding onto wealth. Over the years, Abu Dhabi has actively shifted its focus towards sustainable growth, attracting foreign institutions and fostering an environment that draws global talent. This shift has helped Abu Dhabi transform into not only a hub for capital but also an epicenter for innovation and expertise.
Unlike some other cities that concentrate their wealth management under a single entity, Abu Dhabi takes a multi-faceted approach. Its wealth is managed through multiple SWFs, each with its unique focus, leadership, and strategy. This diversified investment landscape ensures that the city remains a dynamic player on the global stage.
The rise of Mubadala and ADQ
One of the prominent players in Abu Dhabi’s wealth management ecosystem is Mubadala, established in 2002 as a development company. Over the years, Mubadala has evolved into a major global investor, expanding into sectors ranging from technology to healthcare. Mubadala Capital, a branch of the organization, has managed to attract significant third-party equity, raising US$18 billion from international investors, a testament to its growing influence.
Another significant player is ADQ, Abu Dhabi’s newest sovereign wealth entity, launched in 2018. ADQ has quickly risen in prominence, managing a wide array of assets and further solidifying Abu Dhabi’s position in global markets. Beyond these two, Sheikh Tahnoun’s Royal Group has also been instrumental in Abu Dhabi’s rise. Through companies like IHC, Multiply, and Alpha Dhabi, the Royal Group has invested in sectors such as artificial intelligence and healthcare, demonstrating a forward-looking approach to wealth management.
Diversification beyond oil
While Abu Dhabi’s wealth foundation lies in its vast oil reserves—it holds 94% of the UAE’s oil—the emirate has worked tirelessly to diversify its economy. Today, its financial empire stretches far beyond oil pipelines, encompassing industries such as renewable energy, telecommunications, and real estate. Major companies like renewable energy leader Masdar, telecommunications giant e&, and real estate developer Aldar symbolize the breadth of Abu Dhabi’s economic reach.
The emirate’s focus on diversification has allowed it to weather global financial challenges effectively, ensuring that its wealth is not solely dependent on oil revenues. As global markets evolve, Abu Dhabi’s investments in sectors like technology, healthcare, and renewable energy ensure that its title as the world’s richest city will continue into the future.
Abu Dhabi’s global investments in 2024
In the first three quarters of 2024 alone, Abu Dhabi’s three leading SWFs—ADIA, Mubadala, and ADQ—invested a jaw-dropping US$36 billion across various industries worldwide. This sum represents two-thirds of all Gulf SWF investments and an impressive 26% of global SWF investments during the same period. These figures reflect the city’s aggressive yet strategic approach to global investments.
Among the new players making waves in Abu Dhabi’s wealth management scene is Lunate Capital, a newly established entity that has already sealed high-profile deals. With assets under management worth US$105 billion, Lunate Capital has quickly become a significant force, further contributing to Abu Dhabi’s global investment prowess.
The future of Abu Dhabi’s wealth
Looking ahead, Abu Dhabi shows no signs of slowing down. The Abu Dhabi Securities Exchange (ADX), wholly owned by ADQ, is experiencing increased activity, with IPOs booming. Three IPOs in 2024 alone have raised US$1.4 billion, and major names like NMC Healthcare, Lulu Hypermarkets, and even Etihad Airways are expected to go public soon.
Currently, ADX hosts 99 listed companies with a collective market capitalization of US$779 billion. Notably, two-thirds of these companies are owned by domestic SWFs, highlighting Abu Dhabi’s strategy of keeping wealth within its borders while expanding its global footprint.
Abu Dhabi’s future vision
Abu Dhabi’s ascent as the world’s richest city is not just about the sheer magnitude of its wealth, although US$1.7 trillion is an impressive figure. The city’s success lies in its deliberate, diversified, and future-focused strategy for growth. From its early days of oil wealth to its current investments in cutting-edge sectors like artificial intelligence and renewable energy, Abu Dhabi has solidified itself as a global financial powerhouse with a long-term vision.
As the emirate continues to attract global talent and institutions, its role as a leading financial hub will only strengthen. With its diversified portfolio, sustainable growth strategies, and commitment to innovation, Abu Dhabi’s future as the “Capital of Capital” is undoubtedly secure.
