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Abu Dhabi Solidifies Its Position as a Top Global Hedge Fund Haven

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Robert Tavares

March 7, 2024 - 08:18 am

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Abu Dhabi Emerges as Brevan Howard's Premiere Risk-Taking Hub

In a recent development that showcases Abu Dhabi's growing status in the finance world, Brevan Howard Asset Management has positioned the city as its foremost center for risk-taking activities. This move accentuates the emirate's soaring reputation as an up-and-coming hub for hedge funds.

Transforming the Financial Landscape

Brevan Howard, a leading macro-trading investment firm, has channeled approximately $10 billion of their assets into operations based in Abu Dhabi's international financial free zone. This amount represents nearly one-third of the company's overall assets, surpassing the funds managed from their London and New York offices.

The firm established its presence in the Abu Dhabi Global Market just last February and has rapidly expanded its workforce. Currently, over 80 professionals form the local team. To accommodate the increasing number of staff eager to relocate, Brevan Howard plans to acquire additional office space. Despite the clarity in these developments, a spokesperson for Brevan Howard, which boasts an asset management portfolio of roughly $35 billion, declined to comment on these insights.

Strategic Relocations Fuel Growth

Several high-profile Brevan Howard portfolio managers have shifted their base of operations to Abu Dhabi. Among them are Ville Helske and Louis Basger. Furthermore, members of a team that oversees funds governed by the European Union’s UCITS Directive, including Paul Shanta and Peter Meiklejohn, have also moved to the emirate. This strategic relocation of key personnel illustrates the firm's commitment to building a significant presence in Abu Dhabi.

Additional noteworthy moves involve Kaspar Ernst, who splits his time significantly in Abu Dhabi following his return from a sabbatical and was previously stationed in Hong Kong. Minal Bathwal, a senior portfolio manager based in Singapore, frequently visits the Abu Dhabi office, further emphasizing the emirate's rising importance within the company's global operations.

Capital of Capital: Abu Dhabi's Magnetic Appeal

The expansion by Brevan Howard represents one of the boldest moves by financial entities that have rooted themselves in Abu Dhabi. Already home to sovereign wealth funds with control over assets exceeding $1.5 trillion, the emirate has made concerted efforts to reinvent itself as a principal destination for financial firms.

Promoting itself as the "capital of capital," Abu Dhabi has succeeded in attracting investing heavyweights like Ray Dalio, whose family office has opened a branch there. Additionally, other funds like Chris Hohn’s TCI Fund Management and Greg Coffey’s Kirkoswald Asset Management have recently acquired licenses to operate in the burgeoning hub.

In an unusual public statement last year, billionaire Alan Howard, co-founder of Brevan Howard Asset Management, lauded Abu Dhabi for its potential to stand out as a global financial center. According to Howard, as more hedge funds set up shop, banks will follow suit by transferring their senior staff to service these new ventures, thus creating a robust trading ecosystem.

Why Abu Dhabi Is Winning

The reasons for the financial community's gravitation towards Abu Dhabi are multifaceted. Traders find the emirate's offer of no income tax, English law structures, and a strategic time zone particularly enticing. As of the close of the last year, the Abu Dhabi Global Market was host to 102 asset managers operating in its financial free-zone, with institutions managing $452 billion globally establishing a presence.

Billionaire Alan Howard, co-founder of Brevan Howard Asset Management

Brevan Howard initiated its Abu Dhabi operations with the relocation of its senior strategist, Abhijit Chakrabortti, in January last year. This office has rapidly grown to encompass a substantial segment of the firm's digital assets trading arm — Ryan Taylor, the compliance head and chief administrative officer for Brevan Howard Digital, relocated last year as part of the expansion.

The firm has also recently named Oualid Lahsini, formerly a partner at Ares Management Corp. and head of Middle East and Africa relationship management, as the chief executive officer of its Middle East operations, underscoring the importance of the region in their strategic outlook.

Macro Hedge Fund Challenges and Performance

Renowned as one of the foremost 'macro hedge funds,' Brevan Howard specializes in generating profits by leveraging macroeconomic trends. The company, which operates out of Jersey in the Channel Islands, experienced a setback with an estimated 3.2% loss in February.

This loss followed misplaced bets against falling US interest rates, revealing the volatile nature of macroeconomic trend-based trading. Despite this recent dip, Brevan Howard continues to be a respected name in the hedge fund industry.

Bloomberg News contributed to this report by detailing the firm's performance, alongside providing critical assistance from Bei Hu. The report illustrates the challenging environment macro hedge funds navigate and how they adapt to the ever-changing global financial landscape.

Read More on Brevan Howard's Strategic Moves

For those interested in a deeper dive into the strategies and milestones of Brevan Howard, several informational links are available. One such source provides a closer look at the gains racked up by Brevan Howard, alongside details on Alan Howard's decision to scale back on trading activities.

Furthermore, insights into Alan Howard's predictions for Abu Dhabi's financial center future are accessible for review. Such reports provide nuanced perspectives on a hedge fund's orchestration of its investments and strategic geographical repositioning to harness global financial trends.

To explore this detailed information and gain a broader understanding of Brevan Howard's activities and views, visit the following URLs:

  • As Brevan Howard’s Gains Mount, Founder Cuts Back on Trading: Read More.
  • Billionaire Howard Pitches Abu Dhabi as Global Financial Hub: Read More.

These resources will provide depth and context to Alan Howard's vision for the future of the financial industry and how Abu Dhabi is being shaped by the influential steps taken by Brevan Howard.

Conclusion: A New Financial Ecosystem Takes Root

Brevan Howard's bold maneuvers in Abu Dhabi stand as a testament to the emirate's allure for finance giants and its emergence as a new nexus for the global hedge fund industry. With significant assets now managed from this locale, and top-ranking portfolio managers positioning themselves within city limits, Abu Dhabi is strategically leveraging its assets, including its sovereign wealth funds and favorable tax policies, to cement its status as a fulcrum of financial prowess.

The migration of major hedge funds and the ancillary arrival of banking institutions to service these industry titans are indicative of a symbiotic ecosystem in the making, one that could redefine the global financial landscape. As the emirate continues to establish itself as a 'capital of capital,' the future seems destined to unfurl a new chapter of prosperity and innovation for Abu Dhabi on the world stage.

With an eye on the horizon, Brevan Howard, among others, is sowing the seeds that will likely bloom into a vibrant financial arena, rich with opportunities and marked by cutting-edge trading and investment strategies. The narrative of Abu Dhabi's transformation is just beginning, with much to observe and potentially benefit from as it unfolds.

©2024 Bloomberg L.P.

Disclaimer: This article is based on information provided by Bloomberg L.P. and includes reporting with assistance from Bei Hu. All trademarks and copyrights belong to their respective owners. The content presented here is for informational purposes only and should not be considered financial advice.