Asset Management Companies in the UAE

The UAE is the epicenter of the Middle East’s asset management industry, with dozens of asset management companies (AMCs) operating in the country’s affluent economy. Among the AMCs active in the UAE, some stand out from the crowd in terms of their sheer market presence, activity, and assets under management (AuM). In this article, we will take a closer look at the top five AMCs by AuM in the UAE.

Asset Management Companies in the UAE
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What Is an Asset Management Company (AMC)?

Let’s first scope down what we will refer to as an AMC since the precise definition of the term gets somewhat blurred on occasions, with the sell-side investment banks sometimes wrongly called asset managers. An AMC is a company that manages the assets of multiple individual and institutional investors by pooling these assets together and investing them in a variety of financial products and venture equity. AMCs might invest in a wide variety of products – stocks, bonds, commodities, derivatives, cryptocurrencies, startup ventures, and more, through different fund structures, such as mutual funds, hedge funds, index funds, and other pooled capital vehicles.

AMCs represent the buy-side of the financial industry, as they are entities that buy financial products. In contrast, investment banks and brokerages are typically referred to as the sell-side since these firms offer and promote financial products to the buy-side entities.

Some large financial institutions and banks have branched out into offering both asset management, i.e., the buy-side, function as well as investment banking, i.e., the sell-side, advice and analytics to their clients. This tendency of the same business to run both an AMC and a sell-side unit is quite common in the UAE. As we cover the top AMCs of the UAE, you may notice that some of them represent divisions of large UAE banks – Emirates NBD, Abu Dhabi Commercial Bank (ADCB), and Mashreq.

The Top Five Asset Management Companies in the UAE

Dubai Investment Fund

1. Dubai Investment Fund (DIF)

With over $300 billion AuM, the Dubai Investment Fund (DIF) stands head and shoulders above any other AMC in the UAE. Established in 2001, the fund has over 7,000 private and institutional clients in over 60 countries. Among its clients are pension and sovereign-wealth funds, family offices, insurance companies, and others. Given the sheer size of this industry titan, it is no surprise that the fund invests in a very wide range of sectors.

The AMC’s key investment sectors are real estate, renewables, financial institutions, commodities, blockchain/cryptocurrency, and a host of other industry verticals.

The fund continually adapts its investment strategy to adjust to the changing dynamics of financial markets. In 2006, five years after its establishment, the fund adjusted its strategy to explore alternative investments in addition to its core sectors of interest. The Department of Innovative Investment was established that year, emphasizing the fund’s strong intent to explore alternative investment formats and Richard Malone was appointed head of the this department the same year.

The drive toward new sectors, particularly the technology and internet industries, was immediately evident with the fund’s investments that year in stocks of Google, Sony, Nvidia, and Amazon, all four of which were the leading players in the fast-growing technological sector.

A year later, in 2007, the DIF was among the first companies in the region to introduce a digital platform for clients and investors to help them access better market analytics and track their investments’ performance. That year also saw another big drive by the fund to invest in leading technology ventures. This time around, the DIF invested in stocks and owned stakes in numerous companies, including Salesforce, Cisco, Adobe, and SAP, the leaders of the CRM, ERP, and business cloud verticals.

The fund’s penchant for technology stayed strong throughout the years. In 2016, the DIF launched its first Artificial Intelligence (AI) lab in Dubai to explore the emerging sectors of AI, machine learning, and data sciences.

Interestingly, the fund realigned its strategy again in 2020 to focus more on sustainable investment and renewable sectors of the economy. A year later, the DIF made significant investments in renewables and green energy sectors in line with its redefined strategy.

The DIF continues to be the leader among the UAE AMCs, at least as measured by the total AuM, and given its large lead over any other AMC in the country on this measure, it is very likely to stay at the top of the rankings in the foreseeable future.

SHUAA Capital

2. SHUAA Capital

SHUAA Capital is the 2nd largest AMC in the UAE by AuM. The fund manages around $14 billion on behalf of its 2,000+ clients. Founded in 1979 as the Arabian General Investment Corporation (AGICO), the fund changed its name to SHUAA Capital in 2001. In 2016, the Abu Dhabi Financial Group (ADFG), another large UAE-based AMC, acquired 48% of the stake in SHUAA Capital, becoming its majority shareholder.

Three years later, in 2019, SHUAA and ADFG completely merged into one company, boosting the merged fund’s ranking among the UAE-based AMCs.

SHUAA’s asset management division invests in four distinct segments defined by the firm – public markets, private markets, real estate, and debt markets. Real estate investment is a particular strength of this fund, with SHUAA being among the leading real estate AMCs in the country. Some of the fund’s notable investments in the sector include Discovery Gardens and Spring Oasis in Dubai; Baynunah Tower and Corniche Building in Abu Dhabi; and Lulu Retail Mall in Ajman.

Emirates NBD Asset Management

3. Emirates NBD Asset Management

Emirates NBD Asset Management, the asset management arm of the Emirates NBD Bank, is the 3rd AMC in the UAE by AuM. Established in 2006, the AMC manages $6.1 billion across its 16 funds, investing in equities, fixed income, global multi-assets, and real estate.

While Emirates NBD Asset Management itself is domiciled in the UAE, the funds managed by the company are all based in Luxembourg or Jersey. In the past, some of the funds were also based in the Cayman Islands, though none of the company’s open funds are currently domiciled there.

The AMC is active in promoting the Shari’a compliant nature of its products. Of the company’s 16 existing funds, 6 are fully Shari’a compliant, meaning that these investments are in line with Islamic law. For many customers in the UAE and the wider Middle East region, this property of financial products carries significant importance.

Similar to the other leading AMCs in the country, Emirates NBD Asset Management has a significant real estate presence in its portfolio.

ADCB Asset Management

4. ADCB Asset Management

ADCB Asset Management is another AMC with a leading local bank behind it, the Abu Dhabi Commercial Bank (ADCB). The bank established its asset management arm in 2018, and by now, it manages over $2 billion on behalf of its clients.

The AMC has two main streams of products – those managed by the ADCB itself and 3rd party-managed funds. The ADCB managed funds include close to 20 products, mostly equity funds and regional index funds. All the ADCB managed funds are domiciled in Luxembourg.

The AMC’s second product stream – the 3rd party-managed funds – offers a vast choice of over 400 different mutual funds from around the globe to invest in. ADCB Asset Management partners with dozens of fund providers to offer its clients these products. Among the AMC’s partners within this stream are some of the major fund providers – Fidelity, Allianz, BlackRock, Goldman Sachs Asset Management, and others.

Mashreq Capital

5. Mashreq Capital

Mashreq Capital rounds off our list of the top five UAE AMCs. This asset manager is another example of a leading local bank, Mashreq, branching out into asset management services. The oldest private bank in the country, Mashreq established its asset management division in 2006. By now, Mashreq Capital has $1.8 billion AuM, the fifth highest result in the UAE.

Unlike some of the other AMCs in our list, Mashreq Capital’s funds are mostly locally domiciled, in the Dubai International Finance Center (DIFC). The AMC runs a number of fixed-income, equity, and alternative investment funds. Similar to the AMC industry leader, the DIF, Mashreq Capital is also active in exploring alternative investments, even if not at the scale of its larger rival.       

Closing Thoughts

The UAE’s top five asset managers handle amounts estimated at around two billion, in the case of Mashreq Capital or ADCB Asset Management, and up to $300 billion, in the case of the DIF. Summarizing the current state of the asset management industry in the UAE, particularly with regard to the country’s top AMCs, the following are our key observations:

  1. The country’s leading banks readily branch out into establishing significant asset management functions, with 3 of the top 5 AMCs being divisions of the big local banks. Technically, each of these AMCs is a legal structure of its own, separate from the parent bank. However, they are all owned wholly by their respective banks.
  2. The AMC landscape of the UAE has a clearly dominant market leader, the DIF, which manages significantly more value and invests in a wider variety of sectors than its key competitors.
  3. While the DIF is active in emerging and alternative sectors, such as crypto, AI, and green energy, the other leading AMCs, perhaps with the exception of Mashreq Capital, are yet to become more open to these opportunities.
  4. Real estate remains a popular conservative choice for the investment portfolios of the country’s AMCs. All the leading AMCs have significant real estate investments. This is hardly surprising given the real estate industry’s high profile in the UAE, particularly in the Emirate of Dubai.