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Ray Dalio: Abu Dhabi is a "Renaissance State" – The Emergence of a Hedge Fund Hub

📰 What is it about?

• Ray Dalio, the billionaire founder of Bridgewater Associates, recently described Abu Dhabi as a "renaissance state" on a panel at the Abu Dhabi Finance Week discussing the emirate’s rising prominence as a global financial hub.

• Dalio’s comments highlight Abu Dhabi’s strategic efforts to position itself as a key player in the hedge fund industry, leveraging its vast sovereign wealth and neutral political standing. Alongside Dalio, UBS CEO Sergio Ermotti emphasized the city’s connectivity and infrastructure, crucial for its growth as a financial center.

• Abu Dhabi, sitting atop 6% of the world's oil reserves and managing $1.7 trillion in sovereign wealth, has attracted major global firms in the finance and investment sectors. Hedge funds, in particular, are flocking to the city, with notable firms like Brevan Howard managing $10 billion from the emirate. Paul Marshall, co-founder of Marshall Wace, which controls $65 billion, is also in talks to expand operations into Abu Dhabi.

💡 Why it matters?

• Massive Sovereign Wealth:
  Abu Dhabi controls $1.7 trillion in sovereign wealth, positioning it as a key source of capital for global financial firms. This deep pool of wealth has made the emirate a powerful magnet for top-tier hedge funds and asset managers.

• Hedge Fund Influx:
  Abu Dhabi is quickly becoming a hub for hedge funds, with Brevan Howard managing $10 billion locally and Marshall Wace controlling $65 billion. This surge signals the city's growing influence in global finance.

• Global Financial Center Development:
  Abu Dhabi Global Market (ADGM), the financial center, is expanding rapidly. The four towers that once struggled to attract tenants are now nearly full, prompting authorities to extend the free zone’s jurisdiction to a neighboring island. This expansion will add 10 times more space, accommodating the growing influx of firms.

• Strategic Competition with Dubai:
  While Abu Dhabi is positioning itself as a "buy-side hub," Dubai is focusing on private wealth and sell-side services. Dubai already hosts close to 50 hedge fund offices, employing over 1,000 people, and manages more than $1 trillion in private wealth. The competition between the two cities is intensifying as both aim to dominate the Middle Eastern financial landscape.

🔜 What’s next?

• Continued Growth in Hedge Fund Presence:
  With major players like Brevan Howard and Marshall Wace already operating in Abu Dhabi, more hedge funds are expected to follow suit. The expansion of ADGM’s free zone will likely draw more firms looking to capitalize on the emirate's wealth and stability.

• Expansion of Financial Infrastructure:
  Abu Dhabi’s push to expand its financial space indicates further infrastructure development, with more towers and facilities likely to be built to house the growing number of firms.

• Abu Dhabi vs. Dubai in Financial Dominance:
  As both cities battle for financial supremacy, Abu Dhabi may strengthen its position as a hub for institutional investors and hedge funds, while Dubai consolidates its role in private capital. The rivalry will continue to shape the region’s financial ecosystem.

Markets

Property Finder ‘Likely’ to Go Public: CEO reveals

📰 What is it about?

• Property Finder, a major real estate platform in the Middle East and North Africa (MENA), has hinted at the possibility of an Initial Public Offering (IPO) in the future. CEO Michael Lahyani shared that while the company is not actively working on an IPO right now, it is likely to become a public entity at some point. This potential move would provide the platform with access to capital and liquidity for shareholders.

• Founded in 2007, Property Finder has grown to serve over 5.5 million monthly active users across its portals in the MENA region. The platform, available in both English and Arabic, connects property seekers, real estate agents, and developers, offering a wide range of property listings and services.

• In addition to discussing the IPO, Lahyani revealed that Property Finder recently raised $90 million in debt financing to buy back shares from its first institutional investor, Beco Capital. This deal marked a significant step for the company and valued Property Finder at roughly $1 billion, double the company's $500 million valuation after a funding round in 2018 led by General Atlantic.

💡 Why it matters?

• Growing Market Presence:
  Property Finder is a key player in the real estate market across the MENA region, serving millions of active users each month. Its potential IPO signals its expansion and growing influence in the sector.

• Investment Liquidity and Capital Access:
  An IPO would provide the company with an opportunity to raise significant capital and offer liquidity for its investors, which is critical as the platform continues to grow in a competitive market.

• Dubai’s Resilient Property Market:
  The Dubai residential market, where Property Finder is headquartered, is showing strong performance, with sale prices increasing by 20% and rental rates rising by 18% in the first nine months of 2024. The robust market conditions create a favorable environment for real estate companies, including Property Finder.

• Regional IPO Momentum:
  The UAE is gearing up for the highly anticipated IPO of Talabat, a subsidiary of Germany’s Delivery Hero. The AED 7.5 billion ($2 billion) IPO could boost the capital markets in the Gulf, further increasing interest in MENA companies like Property Finder.

🔜 What’s next?

• Potential IPO Timeline:
  While Property Finder is not actively pursuing an IPO at this time, it is likely to go public in the future. Investors and market analysts will be watching closely for updates regarding any progress toward an official filing.

• Market Impact of Talabat’s IPO:
  The upcoming IPO of Talabat is expected to generate significant momentum for IPOs in the region. As the UAE prepares for this major event, Property Finder may see an opportunity to align its own public listing with the rising interest in Gulf state capital markets.

• Continued Growth in MENA Real Estate:
  With Dubai’s real estate market seeing increased demand and higher prices, Property Finder is well-positioned to benefit from continued growth in property transactions. The company’s role as a central platform in this ecosystem could lead to further market share expansion, especially as demand for property in the MENA region remains strong.

Sheikh Tahnoon Meets Masayoshi Son: Fostering Tech and AI Collaboration

📰 What is it about?

• Sheikh Tahnoon bin Zayed Al Nahyan, Deputy Ruler of Abu Dhabi, met with SoftBank founder Masayoshi Son to explore potential investments in advanced technology and artificial intelligence (AI).

• The discussion underscored Abu Dhabi's commitment to becoming a global tech hub and aligning with world-renowned innovators like Son, whose SoftBank Vision Fund has a proven track record of transformative investments.

• The meeting also touched on AI-driven solutions aimed at enhancing human productivity and well-being, marking a strategic alignment between Abu Dhabi’s ambitions and SoftBank’s technological vision.

💡 Why it matters?

• Abu Dhabi’s Strategic Tech Goals:
  Abu Dhabi aims to strengthen its position as a global leader in AI and emerging technologies. Collaborations with pioneers like Masayoshi Son enhance the emirate’s global tech footprint while supporting its vision for a diversified, innovation-led economy.

• SoftBank’s Proven Expertise:
  Masayoshi Son and SoftBank’s Vision Fund have a history of nurturing industry giants, including Alibaba, Uber, and Nvidia. Aligning with SoftBank could accelerate Abu Dhabi's access to cutting-edge technologies, global partnerships, and transformative solutions.

• AI’s Role in Economic Transformation:
  AI and advanced tech are critical to Abu Dhabi’s long-term economic goals, including sectors like healthcare, transportation, and smart infrastructure. SoftBank’s $100 billion "Izanagi" AI chip initiative aligns with these objectives, offering opportunities to co-develop or invest in next-gen tech.

• Economic Diversification in the Region:
  This partnership would bolster the UAE’s broader efforts under Vision 2031, driving sustainable growth through innovation, talent acquisition, and high-tech industries.

🔜 What’s next?

• Potential Partnerships and Investments:

  • AI and Chip Technology: SoftBank’s “Izanagi” initiative could see Abu Dhabi participate in developing or deploying AI chips, furthering its focus on innovation.

  • Venture Capital Collaboration: Opportunities to co-invest in startups or support the UAE’s ecosystem through SoftBank’s global network of over 400 portfolio companies.

• Strengthening Abu Dhabi’s AI Infrastructure:
  Abu Dhabi might leverage SoftBank’s expertise to build its AI ecosystem, focusing on industries like healthcare, energy, and transportation. This could involve AI-powered research centers or accelerator programs.

• Global Leadership in Tech:
  Partnerships with global tech leaders like Masayoshi Son position Abu Dhabi as a hub for international innovation. Future agreements might include co-developing cutting-edge technologies or fostering talent exchange programs to elevate the region’s expertise.

🔍In other news…

1. Stake, the leading global digital real estate investment platform in the Middle East and North Africa region, announced their official launch in the Kingdom of Saudi Arabia.

2. We pulled this off in just 4.5 months, starting from scratch, says Delivery Hero CEO Niklas Ostberg on successful IPO of its Middle Eastern subsidiary Talabat on DFM. They list on DFM today, on December 10.

3. Saudi Arabia experienced a 61% surge in tourist arrivals during the first nine months of 2024 compared to 2019, positioning the Kingdom as the third fastest-growing tourism market globally, according to the UN World Tourism Barometer.

4. Apple is expanding in Saudi Arabia, launching an online store in 2025 and flagship stores in 2026.

5. Oil prices have climbed following the fall of Syrian President Bashar al-Assad’s regime.

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