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Nuveen is set to open its first Middle East office in Abu Dhabi, making it the second investor with over $1tn in assets to announce a bet on the fledgling financial hub this month.
The oil-rich emirate, which is home to sovereign wealth funds worth at least $1.5tn, is wagering that attracting financial services firms to the city will further diversify its economy and wean it off fossil fuel revenues.
Nuveen, the wholly-owned subsidiary of US teachers pension fund TIAA with $1.2tn in assets under management, will initially open a three-person office to deal with its institutional clients in the region. It will be led by former Columbia Threadneedle Middle East managing director Fadi Khoury.
The head of Nuveen’s global client group Mike Perry said contributing to the expansion of Abu Dhabi’s financial centre would give the asset manager a competitive advantage.
Abu Dhabi’s “whole financial marketplace is getting much more complex and built out. It isn’t just flying in and flying out for one client and one pool of capital”, Perry told the Financial Times.
“We’re hitting this inflection point where, if you’re going to win over time, I think you need to be there to help that marketplace grow, be along for the ride,” he said.
Nuveen is the second large US asset manager to announce a new Abu Dhabi office this month, following PGIM less than two weeks ago.
The group has registered with and obtained a licence from offshore financial centre Abu Dhabi Global Market (ADGM), which says it now hosts 112 fund and asset managers. It has not disclosed the amount of assets being managed within the financial centre.
Although competition is mounting from Abu Dhabi, neighbouring emirate Dubai is still the region’s biggest financial hub. The Dubai International Financial Centre says $165bn worth of assets are managed within it.
The Gulf region’s largest economy, Saudi Arabia, is also trying to bulk up its financial centre, aiming to get so-called suitcase bankers to relocate to Riyadh.
But Perry said Nuveen chose to open its first Middle East office in Abu Dhabi, which markets itself as the “Capital of Capital”, because its major clients in the region are there.
“I wouldn’t say that there was any kind of enticement [from Abu Dhabi] aside from just being easy to do business,” Perry said.
But he said that whether Nuveen bulks up its Abu Dhabi office will be down to whether it starts investing in the region, in assets like real estate, rather than just managing relationships with clients.
“The real question is whether we invest in the ground there with assets,” Perry said. “That’s more opportunistic and that is likely what would lead to a larger footprint there.”
Nuveen’s Middle East clients are looking to diversify away from traditional assets, Perry said, with high demand for credit from levered finance to energy transition debt. “The private debt, higher yielding space is where we’re seeing a lot of interest,” he said.
https://www.ft.com/content/a2ad8338-c0a2-4fa8-9eb8-663bbb5aa09e
