Wealth managers are heading towards Gulf countries

With the improvement of diplomatic relations between China and the Middle East, particularly the Gulf countries, the number of wealth managers in Asia who have established their offices in Dubai has increased. Some others are exploring opportunities in Abu Dhabi and Riyadh, as they anticipate an increase in demand from clients in that region, aiming to diversify their investments.

Wealth managers point out that Dubai is considered a major destination for wealth in the Gulf region and is preferred by many businessmen and wealthy families in Asia, especially China, who seek to benefit from favorable policies and expand their businesses.

Cheng Pan, the CFO of Noah Holdings Ltd. (NYSE:NOAH), one of the largest wealth management companies in China overseeing approximately $23 billion of client assets, disclosed that he anticipates his company obtaining a license to operate in Dubai by the end of this year.

He stated that the Dubai branch will focus on providing services for Chinese businessmen intending to establish their businesses in this market.

Pan added, “We aim to increase the wealth of our clients with the ‘Noah’ strategy. Therefore, we must be present and consider the wealth that is generated locally.” He explained that the company intends to first send some employees from China, and later employ local employees.

Pan pointed out that many Chinese entrepreneurs also aim to explore new markets and diversify their supply chains. He mentioned that many of these entrepreneurs are enthusiastic about seizing the available opportunities in the Middle East region.

As tensions escalate in Beijing-Washington relations due to disputes in various issues, the importance of the Middle East has begun to increase for Beijing. These issues include trade, technology, human rights, and Taiwan.

Renewable economic activity, neutral political direction, ease of doing business, convenient time zones, and tax reductions have all contributed to attracting a large number of wealthy individuals to the Middle East, particularly the United Arab Emirates, in recent years after the decline of the coronavirus.

In the meantime, the United Arab Emirates has recently introduced initiatives such as the “Golden Visa System”. Additionally, the “Family Wealth Center” was recently launched in Dubai to support wealthy individuals and companies in dealing with cultural and governance issues.

As a result, Western wealth managers, including the Swiss private bank Lombard Odier, seek to expand their commercial presence in the region to capitalize on immigration and the increase in the number of affluent individuals.

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The Eyes points towards the Gulf

In the continent of Asia, Hong Kong and Singapore have long been regarded as important hubs for accruing the wealth of affluent individuals. However, wealth managers now state that some clients are seeking diversification in other markets and exploring new investment opportunities.

The number of individuals with high wealth globally has declined by 3.3% to reach 21.7 million in 2022, but the number of wealthy individuals in the Middle East region has increased by 2.8% in the same year, according to the 2023 Wealth Report released by Capgemini.

In the year 2022, the United Arab Emirates witnessed the highest net influx of millionaires in the world. Estimates indicate that it received a net inflow of 4,500 individuals in the year 2023, according to data provided by the wealth and migration consulting firm, Henley & Partners, which is based in Dubai.

At the same time, Faro Capital, a family-owned company based in Singapore, established a branch in Dubai last month. Patrick Tsang, Chairman of Tsang Group, a family-owned company based in Hong Kong, announced that the company plans to open new branches in Abu Dhabi and Riyadh in Saudi Arabia this year, following the establishment of its branch in Dubai in 2022.

Riyadh is the economic capital of the Kingdom of Saudi Arabia and has witnessed strong economic development in recent years. Additionally, Riyadh has advanced infrastructure and a secure investment environment, especially in light of Vision 2030, which aims to attract more foreign investments and diversify the economy away from dependence on oil.

In the presence of global technology giants such as Amazon, Google, and Microsoft, these companies and others are working on strengthening their presence in the Kingdom of Saudi Arabia. This is in compliance with the government’s decision to suspend dealings with companies that do not have regional offices in the country.

As the largest economy in the region, the kingdom plans to invest trillions of dollars with the aim of developing itself as a tourist and commercial hub. As a result, multinational companies have started to consider increasing their investments and presence in Saudi Arabia on a larger scale.

Despite the fact that Abu Dhabi is a significant financial hub in the region and enjoys some political stability, it also possesses advanced infrastructure and an attractive investment environment.

Landmark Family Office, a Hong Kong-based company, has announced plans to establish a new office in Dubai in the coming months. Cameron Harvey, the company’s founder and CEO, stated that the new Dubai office will assist clients residing in China, Southeast Asia, and Australia in finding investment opportunities in the Middle East region.

Manish Tiberwal, co-founder of Singaporean company Vara Capital, said:

“The times we are living in are extremely interesting, as political geography has become more important to families than it was before,” he added that Dubai’s efforts to regulate digital assets and use the golden visa system, among other things, have increased the city’s attractiveness.