The Abu Dhabi Global Market (ADGM), the international financial free zone located on Al Maryah Island in the heart of the UAE’s capital city, reported an extraordinary 211% increase in ADGM Assets under Management (AuM) during the first quarter of 2024 compared to the same period in 2023.
ADGM’s asset management sector started 2024 strongly, with a notable influx of global asset managers setting up operations in the international financial centre. By the end of March 2024, ADGM housed 107 fund and asset managers overseeing 137 funds.
“Abu Dhabi once again affirms its position as the leading financial powerhouse of the MEASA region … attracting talent, businesses, and quality investments from across the globe,” said ADGM chairman Ahmed Jasim Al Zaabi.
“This year holds the promise of even greater growth for ADGM and its ecosystem, marking a significant stride towards achieving Abu Dhabi’s economic goals and ambitions.”
The freezone’s unique position as the only jurisdiction in the region to apply English common law directly has significantly contributed to its attractiveness as a financial hub. By the end of March 2024, the total number of operational entities in ADGM had increased by 30% compared to the previous year, reaching 1,950, including 291 financial services entities.
At the end of 2023, ADGM reported that 88 financial institutions and two exchanges had received In-Principle Approvals (IPAs) and a further 125 firms were already in the pipeline to be registered in 2024.
In response to unprecedented demand from major global asset managers in the hedge fund, private equity and venture capital sectors, ADGM embarked on a trade mission to multiple countries during the first quarter of this year. It entered into more than 40 bilateral discussions with US asset management firms at the iConnections Global Alts 2024 event.
Expansion to Al Reem Island
ADGM expanded its jurisdiction last year from the existing Al Maryah Island to include Al Reem Island, making it one of the largest financial districts globally at 14.38 million square metres. ADGM recently unveiled a new incentive initiative to businesses based on Al Reem Island, operating in non-financial and retail sectors.
Eligible businesses on the island will be relieved from any fees associated with acquiring an ADGM commercial licence until 31 October 2024, allowing them to sustain their operations without additional financial obligations as they transition from an Abu Dhabi Department of Economic Development (ADDED) licence to an ADGM licence.
ADGM sustainable finance regulatory framework
ADGM’s Financial Services Regulatory Authority recently started implementing its sustainable finance regulatory framework, which encompasses rules on sustainability-orientated investment funds, managed portfolios and bonds as well as requirements for environmental, social and governance (ESG) disclosures by ADGM companies.
The measures are designed to accelerate the growth of a sustainable finance ecosystem in the jurisdiction and support the UAE’s transition to net zero greenhouse gas emissions.
The framework for green and climate transition funds and portfolios, green and sustainability-linked bonds and sukuks is a significant step in enabling capital to be channelled towards financing the transition to net zero.
In order to recognise products and services that are aiding the transition, ADGM will confer a designation on those that purport to meet its robust minimum standards. It will also permit ADGM’s ‘designation mark’ to be used in marketing materials and client communications.
A designation mark will provide investors with a level of confidence that those products and services purport to meet ADGM’s minimum standards, catalysing investors to channel capital towards the green transition.
