Dubai's DIFC to establish first global centre for the ultra-wealthy and family businesses

The Dubai International Financial Centre is setting up a Global Family Business and Private Wealth Centre in a push to double its contribution to the emirate's economy by 2030.

The centre, the world's first, has been approved by the DIFC Authority's board and will be formally launched next month. It is expected to bring family businesses and ultra-high net worth individuals (UHNWIs) — people with a net wealth of $30 million or more — from regional and global markets to the emirate, the financial free zone said on Monday.

Bringing global family owned businesses, private wealth offices and UHNWIs together in a single centre will help to grow the sector and provide access to a full range of support services to enable legacy and succession planning, it said.

The centre will create a unique offering at a time when about Dh3.67 trillion ($1tn) in assets will be transferred to the next generation in the Middle East over the next decade, the DIFC said.

Financial wealth in the UAE is growing at a rapid pace and is expected to accelerate at a compound annual rate of 6.7 per cent to $1tn in 2026, from $700 billion last year, management consultancy Boston Consulting Group said in a report last month.

The rapid expansion is being driven by growth in financial and real assets. Financial wealth in the UAE grew by an annual 20 per cent last year, compared with 11 per cent globally, with the Emirates recording a net inflow of more than 2,000 millionaires, which helped the country account for 30 per cent of the total financial wealth in the GCC, BCG said.

About 41 per cent of the UAE’s wealth was derived from UHNWIs in 2021 and this is expected to grow to 43 per cent by 2026. Meanwhile, financial wealth worldwide increased by 10.6 per cent in 2021 to $530tn, the fastest growth in more than a decade, the report said.

The number of UHNWIs in the world rose 9.3 per cent last year as the global economic rebound from the coronavirus pandemic and improving equity markets supercharged wealth creation, a March report by global property consultancy Knight Frank showed.

About 41 per cent of the UAE’s wealth in 2021 was derived from UHNWIs and this share is expected to grow to 43 per cent in 2026, the BCG report said.

The establishment of the new centre is “another key milestone in the development of [the] DIFC’s wealth and asset management sector”, said Tarek Hajjiri, who will lead the centre as chief executive. “It embodies [the] DIFC’s long-term commitment to offering quality private wealth management services at par with global standards.”

The opening of the centre is also aligned with the UAE’s commitment to support family businesses, a vital part of its economy.

The move will also help the DIFC to achieve its 2030 Strategy objectives while supporting the sustained growth that has made Dubai a global financial and business centre, the DIFC said.

Operating on an independent basis, the centre will provide advisory services, educate and train; hold outreaches and high-end networking, carry out research and help to resolve disputes. It is estimated that only 20 per cent of family businesses are managed by the third generation in the Middle East and it is crucial to educate those who face challenges related to governance, succession, ownership, wealth, family dynamics and strategy to ensure a solid family business and long-term success, the DIFC said.

The centre will play a “unique role in guiding family businesses” in governance, succession, ownership, wealth, family dynamics and strategy, Mr Hajjiri said.