Asia wealth managers flock to Dubai as clients look to diversify

Noah Holdings

07/01/2024 23:00

By Xie Yu and Yantoultra Ngui
       HONG KONG/SINGAPORE, Jan 8 (Reuters) - A growing number
of wealth managers in Asia are setting up offices in Dubai,
capitalising on warming diplomatic ties between China and the
Middle East and betting on a surge in demand from clients for
geographical diversification.
    Dubai, a major financial hub in the Gulf region, is emerging
as a preferred wealth hub for many entrepreneurs and rich
families in Asia, mainly China, as they look to take advantage
of favourable policies and expand their businesses, wealth
managers said. 
    Noah Holdings  NOAH.N , one of China's top wealth managers
overseeing round $23 billion in client assets, for example, is
expecting to get a business license in Dubai by the end of this
year, said Qing Pan, its chief financial officer.
    The Dubai office will serve Chinese entrepreneurs who are
setting up their businesses in that market, he said. 
    "Noah's strategy has been following the growth of clients'
wealth. That's why we will have to be there and take care of the
wealth generated locally," Pan said, adding that the firm plans
to send some staff from China first and recruit locally later.
    "Many Chinese entrepreneurs are looking for new markets and
diversifying their supply chains, and many are excited by the
opportunities offered by the Middle East."
    The Middle East has grown increasingly important to Beijing
as its ties with Washington have soured amid disagreements on a
range of issues from trade and technology to human rights and
Taiwan.
    A post-COVID economic rebound, neutral political stance,
ease of doing business, convenient time zones, and tax free
status have all contributed to the Middle East attracting droves
of wealthy individuals in recent years.
    The United Arab Emirates (UAE) has in the recent past
introduced incentives such as the 'golden visa' system. Dubai
launched a 'family wealth center' last year to help wealthy
individuals and businesses deal with cultural issues and
governance.
    As a result, western wealth managers including Swiss private
bank Lombard Odier are looking to expand their business presence
in the region to tap into the influx of expatriates and growing
population of rich individuals.
    
    INVESTMENT OPPORTUNITIES 
    In Asia, Hong Kong and Singapore have long been the most
preferred offshore wealth hubs for rich individuals. But some
clients are now looking to diversify into other markets and get
exposure to new investment opportunities, said wealth managers. 
    The global number of high net worth individuals (HNWI) fell
3.3% to 21.7 million in 2022, but the Middle East's HNWI
population increased 2.8% in the same year, according to
Capgemini's 2023 wealth report.
    The UAE saw the highest net inflow of millionaires in the
world in 2022, and the private wealth hub was estimated to have
received a net inflow of another 4,500 in 2023, according to
data from Dubai-based wealth and immigration adviser Henley &
Partners.
    Betting on the trend, Singapore-based multi-family office
Farro Capital set up an office in Dubai last month. Patrick
Tsang, chairman of Hong Kong-based single family office Tsang
Group, said the firm was planning to launch new offices in Abu
Dhabi and Saudi Arabia's Riyadh this year after its Dubai foray
in 2022.  
    Hong Kong-based Landmark Family Office is also planning to
set up an office in Dubai in the coming months. Landmark's
founder and CEO Cameron Harvey said the firm's Dubai office
would be used to help clients based in China, Southeast Asia,
and Australia find investment opportunities in the Middle East.
    A recent survey of 76 Asia Pacific-based single and
multi-family offices, done by Campden Wealth and Raffles Family
Office, found average asset allocation to the Middle East region
at only 1%, with 7% of the respondents planning to increase
that.
    "We live in very interesting times where geopolitics have
become more critical to families than ever before," said Manish
Tibrewal, co-founder of Singapore's Farro Capital, adding
Dubai's push to regulate virtual assets, and the golden visa
system, among others, have enhanced its appeal.

 (Reporting by Xie Yu in Hong Kong and Yantoultra Ngui in
Singapore; Editing by Sumeet Chatterjee and Muralikumar
Anantharaman)
 ((Yu.Xie@thomsonreuters.com;))