Two London Hedge Fund Giants Said to Explore Abu Dhabi Outposts

(Bloomberg) -- Two of London’s biggest hedge funds are considering plans to open offices in Abu Dhabi, bolstering the city’s status as an emerging hub for financial firms.

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Marshall Wace and Capula Investment Management have held talks with Abu Dhabi authorities to potentially expand operations into the emirate, according to people with knowledge of the matter who asked not to be identified because the details are private.

The two firms manage $95 billion between them. While Capula’s plan is at an early stage and no decision has been made yet, Marshall Wace is preparing to start an office that could accommodate more than 20 people — including portfolio managers — in due course, the people said.

Representatives for Marshall Wace and Capula declined to comment.

Their expansion to Abu Dhabi coincides with a broader shift in wealth to the capital of the United Arab Emirates, which is home to the world’s richest family and boasts sovereign wealth funds that manage around $1.5 trillion.

Brevan Howard Asset Management has made the emirate its biggest trading hub, sending dozens of staff to help run billions of dollars from there. Hedge fund billionaire Ray Dalio, Czech tycoon Radovan Vitek, Egyptian magnate Nassef Sawiris and the richest man in crypto Changpeng “CZ” Zhao are among the high net worth individuals who are setting up firms in the city.

While Abu Dhabi’s sovereign wealth funds are a big draw for hedge fund managers making a beeline to open offices there, tax-free income, sunny weather and a time zone that allows workers to trade across Asian, European and US hours are also helping the city and neighboring Dubai lure firms from London, Hong Kong and Singapore.

Abu Dhabi’s financial center reported a 211% increase in assets under management in the first quarter from the same period the year before. As many as 107 asset and fund managers including new entrants Rajiv Jain’s GQG Partners and fund administrator giant SS&C Technologies Holdings now operate from the emirate. An additional 52 entities are looking to join the fray.

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