Wealth Preservation Drives Surge In UAE Family Offices

Bas Kooijman, CEO and Asset Manager of DHF Capital S.A., cites that over half of the family offices established in UAE have been set up in an effort to preserve wealth; this data is predicated on a recent KPMG survey of 625 family office professionals. Bas sheds light on why the popularity of this market is exploding and explains the driving factors behind the country’s financial wealth being on pace to balloon from $700 billion in 2021 to over $1 trillion by 2026.

Family offices are becoming a preferred mode of maintaining wealth for the highly affluent, many of whom have been migrating to the UAE in increased numbers; after attracting 4,000 high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) in 2022, the country is reportedly set to welcome an additional 4,500 millionaires by the end of 2023. These millionaires are looking to preserve their wealth by working with savvy investment funds and managers, a driving force behind why family offices are being established in the UAE at an accelerated rate, and the size of this market is expected to reach the AED 3.67 trillion mark by 2028.

The Dubai International Financial Centre (DIFC) also enacted new Family Arrangement Regulations in January 2023, an implementation to support the growing number of local and international family businesses establishing their presence in the country. Furthermore, the Global Family Business and Private Family Wealth Centre was launched in March to further bolster the UAE’s family office landscape.

Bas Kooijman commented: “Forward-thinking efforts are creating an incentive for HNWIs, UHWNIs, and private wealth offices that operate in DIFC, as well as those who are on the fence about doing so. At the end of the day, family offices contribute over 60% of the GDP in many regions and their significance in driving economic growth cannot be overstated. With the potential to grow and preserve capital, family offices in Dubai are seeing an uptick and simultaneously contributing to the UAE’s economy – it’s a win-win situation both ways. Ultimately, if it wasn’t before, it has now become a no-brainer for affluent individuals to set up shop here.”

The UAE’s economy has thrived in H1 of 2023 with non-oil trade exceeding AED 1.2 trillion. This marks a new half-year record that is well on pace to surpass last year’s total of AED 2 trillion and family offices are undeniably contributing to this growth. Moreover, a combination of factors including a convenient geographic location, tax advantages, and robust financial services are fuelling the UAE‘s family office growth.

Bas’ securitization firm, DHF Capital, provides advice and guidance to various family offices across the UAE and Europe. With Bas at the helm, DHF has provided an annual average ROI of 23% since its inception. Additionally, investors who have worked with Bas since the company’s inception four years ago have witnessed a minimum average ROI of 86% and more than 48 consecutive months of positive returns to more than double their initial investment.