Abu Dhabi, the capital of the UAE, has earned the impressive title of the “Capital of Capital”, boasting an astronomical US$ 1.7 trillion in assets managed through its Sovereign Wealth Funds (SWFs) as of October 2024. This remarkable statistic, revealed in a report by the esteemed Global SWF, positions Abu Dhabi far ahead of global competitors such as Oslo, Beijing, and Riyadh. Significantly, this amount does not even account for the substantial US$ 344 billion overseen by Abu Dhabi’s Royal Private Offices (RPOs). With a dedicated workforce of 3,107 SWF employees – the largest of any city in this sector – it is evident that Abu Dhabi is setting the pace in the financial world.

A recent tweet from the Abu Dhabi Global Market highlights this achievement, stating: “Abu Dhabi now manages the largest sovereign wealth fund (SWF) capital globally with an astounding $1.7 trillion in assets.”

While Abu Dhabi reigns supreme in the realm of SWFs, it’s important to note that Dubai holds the title for the wealthiest city in the region when it comes to its residents. With approximately 72,500 individuals possessing at least $1 million to invest, Dubai stands as one of the richest cities in the world.

Why Abu Dhabi is Leading in SWFs

Abu Dhabi’s relationship with wealth has deep historical roots that began long before it was dubbed the “richest city.” This narrative traces back to 1958, when oil was first discovered in the emirate. Shortly thereafter, the Abu Dhabi Investment Authority (ADIA) was established, marking the beginning of Abu Dhabi’s ascent as a global financial titan. What initially started with the prudent investment of oil revenues in global markets has evolved into a diversified and robust economy with interests spanning various sectors.

Abu Dhabi’s strategy isn’t merely about preserving wealth; it’s also focused on sustainable growth. In recent years, the emirate has actively sought to attract foreign institutions, positioning itself as a hub for both capital and global talent. Unlike other cities that tend to aggregate wealth into a single entity, Abu Dhabi employs a more nuanced approach. With multiple SWFs, each characterized by its own strategy, focus, and leadership, the investment landscape is both complex and lucrative.

• Mubadala: Originally founded in 2002 as a development company, Mubadala has transformed into a significant player on the global financial stage. Recently, Mubadala Capital has successfully attracted third-party equity, raising US$ 18 billion from international investors.
• ADQ: As Abu Dhabi’s newest wealth management entity, ADQ made its entrance in 2018.
• Sheikh Tahnoun’s Royal Group: This intricate network of companies, including IHC, Multiply, and Alpha Dhabi, has made headlines with substantial investments across sectors like AI and healthcare.

While Abu Dhabi’s wealth is deeply rooted in oil—holding a staggering 94 percent of the UAE’s oil reserves—the city’s financial empire today is remarkably diversified. From renewable energy giant Masdar to telecommunications leader e& and real estate powerhouse Aldar, Abu Dhabi’s assets extend far beyond oil extraction. This diversification strategy ensures that the city’s wealth is not solely reliant on fossil fuels but is also geared towards future sustainability.

The numbers corroborate this narrative. While sustained high oil prices have provided a buffer against global financial turbulence, Abu Dhabi’s increasing fiscal surpluses are being strategically channeled into diverse global investments. From tech startups to renewable energy initiatives, Abu Dhabi is solidifying its status as the richest city in the world for the long haul. In 2024 alone, the SWFs of Abu Dhabi have been remarkably active, with ADIA, Mubadala, and ADQ collectively investing US$ 36 billion globally in just the first three quarters. This impressive figure accounts for two-thirds of all Gulf SWF investments and a substantial 26 percent of global SWF investments during the same timeframe.

Moreover, emerging players like Lunate Capital have already secured significant deals, including stakes in ADNOC Oil Pipelines and the renowned ICD-Brookfield Place. With assets worth US$ 105 billion under management, Lunate is set to add yet another dimension to Abu Dhabi’s already illustrious financial profile.

What’s Next for Abu Dhabi?

Looking ahead, the future seems exceedingly bright for this financial capital. The Abu Dhabi Securities Exchange (ADX), wholly owned by ADQ, is witnessing a surge in activity. Initial Public Offerings (IPOs) are thriving, with three already raising US$ 1.4 billion in 2024, and more are on the horizon, potentially including major names like NMC Healthcare and Lulu Hypermarkets. Even the iconic Etihad Airways may be poised for a public offering.

Currently, there are 99 companies listed on ADX, boasting a collective market capitalization of US$ 779 billion. Notably, two-thirds of these companies are owned by domestic SWFs, demonstrating Abu Dhabi’s strategy of retaining wealth locally while simultaneously expanding its global presence.

Abu Dhabi’s ascent as the world’s wealthiest city is not solely about the sheer volume of wealth it commands—though US$ 1.7 trillion is undeniably impressive. It is about a strategic, diversified, and future-oriented approach to growth. From traditional oil revenues to pioneering investments in AI and beyond, Abu Dhabi has firmly established itself as a financial powerhouse.

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