Abu Dhabi Inc. World City Ranking, Deep Dive into AD
According to data compiled and curated by Global SWF, Abu Dhabi is the world’s richest city in terms of capital managed by its Sovereign Wealth Funds (SWFs), with US$ 1.7 trillion as of October 2024.
This figure includes the assets of ADIA, Mubadala (including ADIC and Mubadala Capital), ADQ (including part of Lunate), aid fund ADFD, Tawazun (including EDGE), and federal fund EIA.
Following Abu Dhabi are Oslo (home of the world’s largest SWF, NBIM), Beijing (CIC), Singapore (GIC, Temasek), Riyadh (PIF) and Hong Kong (where China’s second SWF, SAFE IC, operates from).
This figure does not consider the significant capital managed by Abu Dhabi’s Royal Private Offices (RPOs), which can have blurred boundaries with SWFs and account for US$ 344 billion.
In addition to financial capital, Abu Dhabi also leads when it comes to human capital, i.e., personnel employed by SWFs of that particular jurisdiction, with 3,107 staff among the above-mentioned funds.
Following Abu Dhabi are Singapore (GIC, Temasek), Riyadh (PIF), Kuala Lumpur (Khazanah, PNB) and Dubai (ICD, DIF), each of them with over 1,000 employees.
SWFs managed US$ 12.5 trillion in assets as of October 1, 2024, with six cities representing two-thirds of the resources, and Abu Dhabi securing the top spot as the Capital of Capital.
Abu Dhabi could be referred to as “old money” in the context of the Arabian Gulf. Oil was first discovered in the emirate in 1958, and a few years later, the government formed an investment board (today’s ADIA) to oversee the activities of London-based fund managers investing budget surpluses in global markets.
Fast forward 60 years, and the capital of the United Arab Emirates (UAE) has become one of the most affluent cities in the world. And it goes both ways: there are still significant excess revenues being deployed overseas, but also an increasing effort to attract foreign institutions, making its wealth sustainable in the long term.
Abu Dhabi has changed considerably over the decades. The emirate was always content with keeping a low profile and leaving the spotlight on its Northern neighbor. The change in leadership and the need to compete for foreign capital and talent has changed its approach with a new motto: the “Capital of Capital”.
The investment landscape of the emirate is complex by design. While other Sovereign Wealth Funds (SWFs) in the region combine all mandates under the same umbrella, the “Abu Dhabi approach” is characterized by several SWFs with different strategies, different mandates, and different chairmen.
In the years that followed the 2015 oil-price collapse, the emirate went through a consolidation exercise among SWFs – with Mubadala absorbing IPIC and ADIC - and among banks – with FAB and ADCB becoming the new financial giants. A few years later, a new entity called ADQ appeared alongside the existing SWFs.
The past few years have seen increasing activity and importance of family conglomerates, especially those falling under Sheikh Tahnoun’s Royal Group. The web of companies including IHC, Multiply, Alpha Dhabi, G42, and 2.0 only leaves one thing for certain: there is a lot of firepower within the group.
Sustained high oil prices have meant healthy fiscal surpluses for Abu Dhabi since 2020, when it experienced its last stress test. According to Fitch’s forecasts, if things stay the way they are, the Emirate will benefit from US$ 60 billion in surplus in the next two years – which would flow into the already massive ADIA.
This adds to the increasing issuances coming from Abu Dhabi entities, which have raised since 2007 almost US$ 94 billion in debt (71% of it is still outstanding). In the first three quarters of 2024, we have seen ADDoF raise US$ 5 billion, ADQ US$ 4.5 billion, and Mubadala US$ 1 billion - at an average 5.1% rate.
In addition, Mubadala is acting as a pioneer when it comes to managing third-party equity, as Mubadala Capital has raised US$ 18 billion from global investors. This aligns well with the flurry of financial institutions registering in ADGM’s financial-free zone – as many as 68 this year so far, according to Global SWF estimates.
Today, Abu Dhabi SWFs are not only the most sizeable but also the most active in the region and globally. In the first three quarters of 2024, ADIA, Mubadala, and ADQ invested US$ 36 billion in deals across the world, i.e., two-thirds of what all Gulf SWFs invested, and 26% of what all SWFs globally invested in that period.
The newest player in town is Lunate Capital, a US$ 105 billion manager that was set up in January with the portfolios and teams of Chimera (IHC / Royal Group), and ADQ’s alternatives, including ADG. Lunate has already completed some high-profile investments including ADNOC Oil Pipelines, ICD-Brookfield Place, and 42XFund.
In addition to all its sovereign investors, Abu Dhabi counts on national champions that are partly owned by those same institutions and that are capable of pursuing investments overseas. These include Etihad (aviation), ADPorts (terminals), e& (telecom), TAQA (utilities), Masdar (clean energy), Aldar (real estate), and G42 (AI).
Lastly, the Abu Dhabi Stock Exchange, or ADX (owned by ADQ) is increasingly active and important. In the year to date, we have seen three IPOs raising US$ 1.4 billion, and we expect three more by year-end: NMC Healthcare, Alpha Data and Lulu Hypermarkets. ADQ could also take Etihad public soon.
Today, there are 99 companies listed in ADX with a market capitalization of US$ 779 billion. Two-thirds are owned by domestic Sovereign Investors, including the Royal Group and its subsidiaries (29%), ADQ (14%), ADNOC (13%), and Mubadala (4%). Federal fund EIA can buy up to 5% in most IPOs that take place in the UAE.
Cognizant of dependency on domestic investors and of the global uncertainty facing equities, in 2021 the government launched the IPO Fund (ADIPOF), which aligns well with the rest of efforts across the Department of Economic Development to ensure a sustainable and wealthy future for Abu Dhabi.
Abu Dhabi’s first financial institutions were formed before the country’s independence: in 1966, the Abu Dhabi Department of Finance (ADDoF), and in 1967, the Abu Dhabi Investment Board (ADIB) under Sheikh Khalifa’s chairmanship to oversee London-based external fund managers. The latter changed its name in 1976 to Abu Dhabi Investment Authority (ADIA), and in 1997, Khalifa’s half-brother Ahmed became Managing Director. He led the institution until 2010, when his sudden death transferred the position to his full-brother Hamed. Today, ADIA is one of the world’s largest SWFs, and one of the very few globally to be led by a royal family member.
Over the years, two additional entities came out of ADIA: the International Petroleum Investment Corporation (IPIC), which was established in 1984 as a JV with Abu Dhabi National Oil Company (ADNOC); and the Abu Dhabi Investment Council (ADIC), which was spun off in 2007 with a majority of the domestic holdings. Today, both SWFs have been absorbed by Mubadala Investment Company (MIC), although ADIC continues to operate and to invest in a largely independent manner.
Mubadala itself was born in 2002, as the brainchild of current ruler Sheikh Mohamed. Initially a development company, Mubadala (Arabic for exchange) took over most of the projects attracted by the offset program since 1992 and has evolved significantly over the years under the leadership of trusted advisor Khaldoon Al Mubarak.
In 2018, and counter-intuitively with the consolidation of the financial sector, the Government of Abu Dhabi established yet another SWF, the Abu Dhabi Development Holding Company (ADQ). This added to the significant portfolio of Sheikh Tahnoun, who is also a chairman of the very large Royal Group and all its subsidiaries, including International Holding Corporation (IHC), Multiply Group, Alpha Dhabi Holding (ADH), 2PointZero, and G42; in addition to ADIA since 2023.
Other significant RPOs include Sheikh Hazza’s Abu Dhabi Capital Group (ADCG) and Sheikh Mansour’s Abu Dhabi United Group (ADUG), owner of Manchester City FC. The emirate’s retirement fund, the Abu Dhabi Pension Fund (ADPF), manages the pensions of Abu Dhabi-based nationals, which make up 11% of the population.
In addition to all these investment companies, there are three federal entities headquartered in Abu Dhabi: the Central Bank of the UAE (CBUAE), which manages the reserves and issues the dirham currency; the Emirates Investment Authority (EIA), which serves as the custodian of certain strategic assets; and the General Pension and Social Security Authority (GPSSA), which manages the pensions of all Emiratis outside of Abu Dhabi. CBUAE and EIA are also chaired by Sheikh Mansour.
Today, the list of directors overseeing Abu Dhabi’s oil and investments is made of only 54 individuals (49 men, 5 women), including 10 members of the Al Nahyan family, 43 Emiratis from other families, and Finnish national Kaj-Erik Relander, who was CIO of EIA and is now a board member of ADQ.
The Government of Abu Dhabi is today led by two major bodies. The first one is the Supreme Council for Financial and Economic Affairs (SCFEA), which replaced the Supreme Petroleum Council (SPC) in 2020 to oversee the emirate’s financial, economic, and petroleum affairs, including ADNOC, ADDOF, ADIA, Mubadala and ADQ. The group is formed by six Al Nahyan family members, along with four key advisors: Khaldoon Al Mubarak, Ahmed Al Mazrouei, Jassem Al Zaabi, and Sultan Al Jaber.
The second body is the Abu Dhabi Executive Council (ADEC), which acts as the domestic cabinet and includes the heads of the 10 most important departments (i.e., ministries) of Abu Dhabi. Its function is complemented by the Abu Dhabi Chamber of Commerce and Industry (ADDCI), which was recently reformed to include some of Abu Dhabi’s business leaders, including foreign-born Amer Kakish (Ittihad), Syed Shueb (IHC), Karl Magnus (Careem), Antonoaldo Neves (Etihad), and Low Ping (EIH).
As highlighted on page 6, Abu Dhabi occupies 81% of the land in the UAE, holds 94% of the oil reserves (both onshore and offshore), and it generated 68% of the country’s GDP in 2023, totalling US$ 310 billion. According to that year’s population census, less than 40% of the UAE’s population lived in Abu Dhabi, meaning that GDP per capita is currently around US$ 82,000, more than three times that of the other emirates.
Importantly, the Emirate enjoys an enviable fiscal position: it is the only territory to be rated consistently with AA (S&P, Fitch) and Aa2 (Moody’s). According to Fitch, it has one of the lowest government debt levels (15% of GDP) and one of the highest liquidity ratios (350% of GDP) among all sovereigns rated by Fitch. As of December 2023, Abu Dhabi is responsible for only a third of UAE’s total government debt.
In June 2024, Fitch forecast that Abu Dhabi would run fiscal surpluses of 5.4% of GDP in 2024 and 3.6% in 2025, after an estimate of 11% of GDP in 2023.
Considering the significant growth of GDP expected in the next three years (6.6% in 2024, 3.6% in 2025 and 3.7% in 2026), this would translate into significant fiscal surpluses for the emirate. In fact, Abu Dhabi could secure a combined US$ 138 billion in surplus between 2021 and 2026.
At the end of the forecast period, the emirate is expected to lower its debt from 15% to 13% of GDP, and to increase its liquid assets to GDP from 350% to 376%.
The Abu Dhabi Department of Economic Development (ADDED) is, according to Law #7 of 2018 and in line with Economic Vision 2030, the branch of the government tasked with regulating the business sector and with leading economic initiatives to achieve knowledge-based, diversified and sustainable economic growth.
ADDED helps support a thriving ecosystem for businesses and individuals while shaping the economy towards global competitiveness and diversification. Abu Dhabi Global Market (ADGM) is the city’s international financial center and free zone authority, while Abu Dhabi Investment Office (ADIO) is an investment promotion agency. These are in addition to Hub71, a global tech ecosystem championing startup growth from Abu Dhabi.
According to Global SWF analysis, 68 financial services firms, including Nuveen, PGIM, General Atlantic, Seviora, and Blue Owl, registered at ADGM in the first three quarters of 2024. In addition, the foreign direct investment (FDI) inflow into the UAE has not stopped growing since 2015, and it peaked at US$ 30.7 billion in 2023.
Global SWF estimates that by 2024 Abu Dhabi-based SWFs manage US$ 1.7 trillion in assets. These include Abu Dhabi institutions ADIA, Mubadala, ADQ, ADFD, Tawazun, and all their subsidiaries, as well as the Federal SWF, the Emirates Investment Authority (EIA), which is headquartered in Abu Dhabi.
This is in addition to Central Banks (US$ 0.2 trillion), Public Pension Funds (US$ 0.1 trillion), and Royal Private Offices (US$ 0.3 trillion), for a combined US$ 2.3 trillion.
Abu Dhabi SWFs have seen their AuM decrease only on two occasions: in 2015, due to the oil shock; and in 2022, due to the crash in global financial markets.
We estimate that by 2030, the AuM of Abu Dhabi SWFs could rise to US$ 2.3 trillion, and the AuM of all its Sovereign Investors, US$ 3.4 trillion.
Most investment activity is spearheaded by ADIA, Mubadala, and ADQ, which according to Global SWF invested US$ 36 billion in the first three quarters of 2024.
Historically, a sixth of all investments has been domestic (mainly, Mubadala, ADQ), while the rest has been directed to the USA, the UK, Spain, India, and China.
Capital deployment is diversified in terms of industries, with financials (20%), infrastructure (19%), real estate (17%), and energy (17%) as the popular sectors.
The investment landscape of Abu Dhabi is very complex, with several institutions having overlapping roles, and designations becoming somewhat blurred. In addition, only CBUAE, Mubadala, and ADQ officially report the size of their balance sheet. The rest of AuMs are estimated by Global SWF based on publicly available datapoints.
Only selected family offices from Al Nahyan family members are shown. In the case of various owners, only the main chair / sponsor is shown.
