Abu Dhabi’s strive to outshine fraternal Dubai as global financial hub

Abu Dhabi, the political center of the United Arab Emirates, is seeking to carve out a distinct role in the global financial landscape and get out from under Dubai’s long-standing dominance as the region’s commercial hub. While Dubai has built a reputation as the Gulf’s leading banking and business destination, Abu Dhabi is focusing on attracting asset managers, private equity firms, and hedge funds. The emirate aims to reclaim lost ground and position itself as a key international financial hub.

Calling itself the “capital of capital,” Abu Dhabi boasts an estimated $1.7 trillion in sovereign wealth holdings out of the UAE's total sovereign wealth and public pension assets making up $2.49 trillion, according to data cited from the 2025 mid-year report by Global SWF.

It plans to leverage these assets to develop a strong financial ecosystem that rivals Dubai’s vibrant banking sector while presenting itself as a safe, low-tax jurisdiction for the world’s ultra-wealthy.

Big names in the financial world such as Bridgewater’s Ray Dalio, BlackRock’s Larry Fink, and Blackstone’s Steve Schwarzman have been seen networking in Abu Dhabi, which according to the Financial Times is indicative of the emirate’s progress in persuading global money managers to establish a presence there.

Playing catch-up to Dubai

For years, Abu Dhabi was slower than Dubai in moving beyond oil dependency. Dubai launched its offshore financial center over 20 years ago, while Abu Dhabi’s initiatives only recently started to gain traction.

“Abu Dhabi Inc as a group of sovereign wealth funds has been one of the most active investors globally in public and private markets, and being closer to that ecosystem makes sense,” the article cited one asset manager operating in the region. “It’s also a place where talent wants to be.”

What sets Abu Dhabi apart is its immense financial power derived from oil and gas reserves, which dwarf Dubai’s modest hydrocarbons. Meanwhile, Saudi Arabia—home to the region’s largest economy—is also diversifying its economy and courting major financial players, positioning itself as another regional contender.

Abu Dhabi’s financial might

Three major sovereign wealth funds dominate Abu Dhabi’s financial landscape:

The Abu Dhabi Investment Authority (ADIA), established in 1976, operates conservatively and is one of the world’s largest wealth funds.

Mubadala, functioning more like a private equity firm, focuses on high-return investments.

ADQ, created in 2018, is a holding company designed to accelerate economic diversification with an emphasis on regional growth.

The Abu Dhabi Global Market (ADGM), the emirate’s offshore financial hub, opened in 2015. However, only in recent years has it gained real momentum, with asset managers now setting up offices in significant numbers. By the end of Q1 this year, the article highlights that ADGM hosted 144 money managers—a 41% increase since the end of 2023.

“The era of suitcase bankers flying in for quick deals is over,” said Bhaskar Dasgupta, a former ADGM executive.

Recent entrants include US giants PGIM and Nuveen, private equity firms General Atlantic and Lone Star, and London-based hedge fund Marshall Wace. Brevan Howard, Alan Howard’s $34 billion hedge fund, chose Abu Dhabi as its Middle East base in 2023 and now employs more than 100 people in the city. BlackRock also opened an office this year, signalling long-term commitment.

Why funds are flocking to Abu Dhabi

The appeal for global investors lies in proximity to sovereign wealth funds, zero personal income and capital gains taxes, and connectivity with Asia and Africa. The Financial Times points out that the ADGM’s crypto-friendly rules, English law-based system, and the world’s first fully digital court add further advantages.

“There’s the same vibe in Abu Dhabi as there was in Hong Kong about 20 years ago,” said one person who works for a hedge fund and relocated from London to Abu Dhabi. “There’s a real sense of being on the ground floor of where the action is.”

Prominent investors such as Leon Black and Ray Dalio have set up family offices in ADGM. The article argues that the UAE is also benefiting from a surge of wealthy individuals leaving the UK after the abolition of the non-dom tax regime in April 2025, which previously allowed foreign nationals to shield overseas income from UK taxes.

As the region’s financial hubs evolve, the article highlights how Abu Dhabi appears to be emerging as the preferred location for hedge funds and asset managers, while banks continue to favour Dubai. “It’s not a zero-sum game,” said Arvind Ramamurthy, ADGM’s market development chief. “But Abu Dhabi is becoming the ground floor for the next phase of growth.”

By Nazrin Sadigova