The DIFC’s Authority Board has just approved the opening of a Global Family Business and Private Wealth Centre in the UAE
UAE
The new initiative is being launched by the Dubai International Financial Centre next month
The new initiative is being launched by the Dubai International Financial Centre next month with the hopes it will double its contribution to the Emirates economy, help the sector grow and provide access to a full range of support services to enable legacy and succession planning within new and existing UHNW Families.
The UAE is already a hub for family wealth. Financial wealth grew by 20% in the region last year compared with 11% globally. 41% of this wealth derived from UHNWI’s and Family Offices in 2021 and this is expected to grow to 46% by 2026. The UAE recorded a net inflow of more than 2,000 millionaires in 2021 which helped the country account for 30% of the total financial wealth in the GCC and with more UHNW Families setting their sights on the UAE as a home for their Family Offices, that wealth is set to soar.
Tarek Hajjiri, Chief Executive Officer of the new centre said: “The centre is another key milestone in the development of the DIFC’s wealth and asset management sector. It embodies the DIFC’s long-term commitment to offering quality private wealth management services at par with global standards.”
While Hajjiri and the wider DIFC team appeal to new Family Offices on a global scale, family businesses already existing within the UAE framework have been professionalising their wealth with the help of Initial Public Offerings (IPOs), adding to the UAE offering.
The listing of Saudi Aramco in 2019 served as a massive driver in motivating families to take their operating businesses public to help grow their enterprises and decentralise their assets and with more than 60% of all operating businesses in Saudi Arabia being run or controlled by families, there is a huge amount of wealth still yet to be made. Family wealth that already contributes to over 33% of GDP.
Over the last 24 months, we have been contacted by a number of Family Businesses in Saudi looking to establish Family Offices due to liquidity events and we now have five of the top ten Saudi Family Businesses as Clients. They are very keen on creating robust corporate governance structures which presents both a challenge for their Family Offices and great opportunities for businesses like ours.
The demand for top talent from developed parts of the world has proliferated as the newly professionalised Family Offices require both Leaders for their boards and equally, highly skilled investment professionals to manage their balanced portfolios. Family Offices in the region are heavily investing in global macros and equally, in the illiquid space via Private Equity and Real Estate.
The executive and investment-focused talent pool in the Middle East is incomparable to the likes of New York and London where many of these businesses are sourcing talent from but it is a challenge simply fixed with professionals fascinated by the Saudi Family Office landscape. One that is evidently growing.
With favourable taxation and a drive to change their global image, Saudi Arabia is definitely a growth area in terms of wealth creation and a space to watch out for but in terms of IPOs on a global scale, they are the perfect example of what is possible when going public.
$1TRN (Dh3.67 trillion) is set to be transferred to the next generation in the Middle East over the next decade and with existing family businesses professionalising the way they manage their assets and the UAE rapidly gaining global interest as a Family Office destination, we anticipate that the Emirates will experience tremendous growth in the next 12 months.