Unlocking securities-backed financing in a booming UAE investment landscape
Amidst the sands of economic growth in 2024, characterized by surging rates and tightened liquidity, the United Arab Emirates (UAE) stands as an oasis for foreign direct investment (FDI). Within this dynamic landscape, the UAE’s economic growth remains buoyant, with significant inflows driving its economy, marked by a substantial 10% year-on-year increase in FDI. The World Investment Report 2023 by the United Nations Conference on Trade and Development (UNCTAD) underscores this remarkable growth, revealing that FDI in the UAE reached an impressive $22.737 billion in 2022.[1]
As investors and businesses navigate this economic terrain, private financing emerges as a strategic avenue for those seeking stability and the potential to capitalize on the thriving and dynamic UAE market, which has risen as the 16th top recipient of FDI worldwide.[2]
Accelerating IPO listings and global connectivity
The Dubai International Financial Centre (DIFC) has been instrumental in promoting future IPO listings and stimulating the country’s equity market. With the government’s commitment to expanding the size of its financial market, Dubai has solidified its status as the country’s financial services hub. The shift has concurrently unlocked opportunities for the Gulf Cooperation Council’s (GCC) asset management industry, intensifying its competitiveness in offshore investing through increased sophistication in product offerings and supportive regulatory initiatives.[3]
Hamed Ali, Chief Executive Officer of the Dubai Financial Market (DFM), has expressed strong interest in actively pursuing avenues for cross-border collaborations with stock exchanges in China, Hong Kong, and the broader Asia-Pacific region.[4]
Such initiatives enhance the UAE’s global connectivity and provide investors with increased opportunities for diversification and growth. In the face of geopolitical tensions in the Middle East, Dubai’s IPO market outlook remains resilient and positive, offering a contrasting environment compared to markets in the US and Europe, according to PwC.[5]
Driving economic diversification with securities-backed financing
The UAE offers diverse opportunities for individual investors and financial advisors alike with its government’s strategic sectoral focuses. Key sectors such as technology, logistics, and financial services[6] shine with a positive outlook for investors, while asset managers actively explore ways to help clients achieve enhanced financial returns. Amidst this backdrop, capital solutions tied to securities gain prominence, enabling investors to tap into these expanding sectors and align their investment strategies with the UAE’s economic diversification goals while effectively mitigating risk.
Among the series of initiatives implemented to reduce its dependence on oil and drive economic diversification, the UAE launched the world’s first dedicated center for family wealth in March 2023 to support family businesses with digitalization, cultural issues, governance, and succession planning.[7] The appeal of the UAE extends beyond wealth managers, attracting ultra-high-net-worth individuals (UHNWIs) who are drawn to the supportive business environment, low tax rates, and geographical advantage. These UHNWIs view the UAE as an ideal destination to grow their wealth and diversify their investment portfolios.[8]
The substantial influx of capital into the UAE is also fueling the growth of the region’s real estate sector, with luxury property sales valued at $25 million and above doubling in 2023, according to property consultant Knight Frank LLP.[9] This flourishing market presents wealth managers with opportunities to explore creative ways for value creation, such as securities-backed financing, where the potential of underlying assets will be utilized. Meanwhile, investors can also capitalize on the region’s real estate sector.
EquitiesFirst’s strategic expansion in a flourishing region
In 2024, EquitiesFirst, a pioneer in alternative financing solutions, is set to make a significant mark by establishing its presence in the heart of Dubai. This move comes against the backdrop of the UAE’s robust investment landscape and steadfast economic development. As the region presents itself as a reliable market on a long-term trajectory,[10] EquitiesFirst’s strategic move aligns seamlessly with the burgeoning opportunities enabled by its expanding financial market and ambitious plans to bolster its global economic standing.
In an era of market uncertainties, adopting an innovative mindset is essential to identify prospective areas for strong value creation. EquitiesFirst’s financing model aligns the long-term interests of its partners and the firm. As a capital provider that offers competitive and transformative liquidity, investors and businesses are empowered to tap into the underlying potential of their assets through EquitiesFirst’s securities-backed financing while navigating the dynamic and resilient UAE market. The expansion underscores EquitiesFirst’s commitment to empowering clients to seize growth opportunities, diversify portfolios, and thrive in a market through economic dynamism and forward-looking financial initiatives.
[1] https://u.ae/en/information-and-services/finance-and-investment/foreign-direct-investment
[2] https://u.ae/en/information-and-services/finance-and-investment/foreign-direct-investment
[3] https://www.strategyand.pwc.com/m1/en/strategic-foresight/sector-strategies/financial-sector-consulting/opportunities-in-asset-management.html
[4] https://www.scmp.com/business/banking-finance/article/3241217/dubai-explores-collaborations-stock-exchanges-including-those-hong-kong-and-asia-eye-future-dual
[5] https://www.pwccn.com/en/audit-assurance/publication/global-ipo-watch-aug2023.pdf
[6] https://www.dubai.com/blog/uae-economy-period-remarkable-growth-and-diversification/#:~:text=finance%2C%20and%20technology.-,Diversification%20Efforts,more%20balanced%20and%20resilient%20economy
[7] https://www.mediaoffice.ae/en/news/2023/March/01-03/difc-famwealth
[8] https://jingdaily.com/posts/chinese-wealth-shifts-to-dubai-as-business-opportunities-boom
[9] https://www.bloomberg.com/news/articles/2024-01-15/dubai-sales-of-25-million-homes-double-as-global-elite-move-in
[10] https://www.dubai.com/blog/uae-economy-period-remarkable-growth-and-diversification/#:~:text=finance%2C%20and%20technology.-,Diversification%20Efforts,more%20balanced%20and%20resilient%20economy
Disclaimer
Past performance does not guarantee future returns, and individual returns are not guaranteed or warranted.
This Document is intended solely for accredited investors, sophisticated investors, professional investors, or otherwise qualified investors, as may be required by law or otherwise, and it is not intended for, and should not be used by, persons who do not meet the relevant requirements. The content provided herein is for informational purposes only and is general in nature and not targeted to any specific objective or financial need. The views and opinions expressed in this Document have been prepared by third parties and do not necessarily reflect the views and opinions of EquitiesFirst. EquitiesFirst has not independently examined or verified the information provided herein, and no representation is made that it is accurate or complete. Opinions and information herein are subject to change without notice. The content provided does not constitute an offer to sell (or solicitation of an offer to purchase) any securities, investments, or any financial products (“Offer”). Any such Offer shall only be made through a relevant offering or other documentation which sets forth its material terms and conditions. Nothing contained in this Document shall constitute a recommendation, solicitation, invitation, inducement, promotion, or offer for the purchase or sale of any investment product by First Holdings, LLC or its subsidiaries (collectively, “EquitiesFirst”), nor shall this Document be construed in any way as investment, legal, or tax advice, or as a recommendation, reference, or endorsement by EquitiesFirst. You should seek independent financial advice prior to making an investment decision about a financial product.
This Document contains the intellectual property of EquitiesFirst in the United States and other countries, including, without limitation, their respective logos and other registered and unregistered trademarks and service marks. EquitiesFirst reserves all rights in and to their intellectual property contained in this Document. The Document should not be distributed, published, reproduced or otherwise made available in whole or in part by recipients to any other person and, in particular, should not be distributed to persons in any country where such distribution may lead to a breach of any legal or regulatory requirement.
EquitiesFirst make no representation or warranty with respect to this Document and expressly disclaim any implied warranty under law. You acknowledge that EquitiesFirst is not liable under any circumstances for any direct, indirect, special, consequential, incidental, or punitive damages whatsoever, including, without limitation, any lost profits or lost opportunity, even if EquitiesFirst has been advised of the possibility of such damages.
EquitiesFirst makes the following further statements that may be applicable in the stated jurisdiction:
Australia: Equities First Holdings (Australia) Pty Ltd (ACN: 142 644 399) holds an Australian Financial Services Licence (AFSL Number: 387079). All rights reserved.
The information contained on this Document is intended for persons located in Australia only and classified as a Wholesale Client only as defined in Section 761G of the Corporations Act 2001. The distribution of information to persons outside this criteria may be restricted by law and persons who come into possession of it should seek advice and observe any such restriction.
The material contained in this Document is for information purposes only and should not be construed as an offer or solicitation or recommendation to buy or sell financial products.
The information contained in this Document is intended to be general in nature and is not personal financial product advice. Any advice contained in the Document is general advice only and has been prepared without considering your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided and the nature of the relevant financial product having regard to your objectives, financial situation and needs. You should seek independent financial advice and read the relevant disclosure statements or other offer documents prior to making an investment decision about a financial product.
Hong Kong: Equities First Holdings Hong Kong Limited is licensed under the Money Lenders Ordinance (Money Lender’s Licence No. 1681/2023) and to carry on the business of dealing in securities (Type 1 licence) under the Securities and Futures Ordinance (“SFO”) (CE No. BFJ407). This Document has not been reviewed by the Hong Kong Securities and Futures Commission. It is not intended as an offer to sell securities or a solicitation to buy any product managed or provided by Equities First Holdings Hong Kong Limited and is only intended for persons who qualify as Professional Investors under the SFO. This document is not directed to individuals or organizations for whom such offers or invitations would be unlawful or prohibited.
Korea: The foregoing is intended solely for sophisticated investors, professional investors or otherwise qualified investors who have sufficient knowledge and experience in entering into securities financing transactions. It is not intended for, and should not be used by, persons who do not meet those criteria.
United Kingdom: Equities First (London) Limited is authorised and regulated in the UK by the Financial Conduct Authority (“FCA”). In the UK, this Document is only being distributed and made available to persons of the kind described in Article 19(5) (investment professionals) and Article 49(2) (high net worth companies, unincorporated associations etc.) of Part IV of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (‘’FPO’’) and any investment activity to which this presentation relates is only available to, and will only be engaged in with, such persons. Persons who do not have professional experience in matters relating to investment or who are not persons to whom Article 49 of the FPO applies should not rely on this document. This Document is only prepared for and available to persons who qualify as Professional Investors under the Markets in Financial Instruments Directive.
