An individual who transitioned from a banking profession to becoming a money manager, entrepreneur, and expatriate, who departed from London accompanied by his youthful kinfolk. “One must contemplate the United Arab Emirates in the following manner,” he opined. He further expounded on the exceptional construction of physical infrastructure and national framework undertaken in the region. Drawing parallels with the legal systems of Singapore and Hong Kong, he highlighted the assimilation of English common law within various business-friendly jurisdictions such as ADGM and DIFC. Moreover, he emphasised the indispensability of intangible assets such as software and intellectual property, asserting that the nation diligently employs every means necessary to allure the most talented individuals from across the globe, encouraging them to relocate and establish their enterprises within its borders.
ADGM, denoting Abu Dhabi’s prominent financial hub, materialised in the year 2015 and presently accommodates an excess of 4,000 duly registered business entities. This encompassing locale boasts an array of amenities, including shopping establishments, opulent residential accommodations, hotels, educational institutions, judicial facilities, regulatory bodies, and thriving venture business hubs. A staggering workforce of over 13,000 individuals diligently operates within its confines, with future plans underway to expand its capacity tenfold. Correspondingly, DIFC, serving as the equivalent financial centre in Dubai, came into existence nineteen years ago and currently employs a workforce of 36,000 personnel. This vibrant locale houses a staggering 700 technology companies and serves as a base for 27 of the world’s 29 systemically important financial institutions (SIFIs). Moreover, it hosts 60 hedge funds, solidifying its stature as a global financial powerhouse. Both cities, Abu Dhabi and Dubai, proudly claim the distinction of being ranked among the safest places to reside worldwide. Remarkably, these thriving economic havens boast a zero percent income tax and investment tax rate.
Shan Aggarwal, the head of venture investing at Coinbase, offered his astute observations regarding the foundation of the United States’ start-up infrastructure, which was painstakingly cultivated over generations, primarily revolving around esteemed academic institutions. He underscored the ease with which such an infrastructure is often taken for granted. Engaging in dialogue with a venture investor affiliated with one of the United Arab Emirates’ sovereign wealth funds, Aggarwal commended the remarkable ecosystem being cultivated within the region for early-stage ventures. He expressed his awe at its superior quality, surpassing anything he had witnessed outside of the United States. The infrastructure was lauded for its remarkable attributes, which include a resolute sense of purpose, vertical integration with esteemed governmental leaders, investors, sovereign wealth funds, business centres, entrepreneurial hubs, regulatory bodies, and banks.
“The tally of our venture investments over the course of the past five years has exceeded 400,” Shan proclaimed. He proceeded to illuminate their investment strategy, elucidating their penchant for early-stage investments of modest proportions. Geographically speaking, approximately 30% of their portfolio companies trace their roots back to origins outside of North America. Furthermore, he highlighted that within the past year, a notable subset of their companies, numbering between 10 to 20, have either relocated to the United Arab Emirates or contemplated establishing a presence there. Notably, these developments occurred organically, and the ventures in question encompass some of the most formidable teams in their respective domains, as attested by Shan. The SWF venture investor, engaging in the conversation, affirmed their broad investment reach spanning the globe, emphasising that many of their strategic investments exhibit a markedly long-term outlook. These investments tend to be of a grander magnitude than those pursued by Shan’s organisation. Moreover, the recipient companies of their investments are acutely aware that behind the initial capital lies a formidable entity of substantial magnitude.
“The mining company occupies the upper floor,” disclosed the investor, who specialises in supporting startups that construct essential digital asset infrastructure while capitalising on America’s cautious approach toward embracing blockchain technology. Notably, the United Arab Emirates (UAE) is poised to host COP28 this December, coinciding with its endeavour to develop a substantial nuclear power generation capacity exceeding 5 gigawatts. As is the case with all renewable energy projects, the predicament of cost-effectively storing surplus electricity generated during off-peak periods persists. To address this challenge, the UAE has embarked on bitcoin mining utilising the surplus electricity, reaping annual proceeds surpassing $100 million, which are then allocated to bolster investments in renewable energy. With unwavering determination, the investor expressed, “Our current operations merely represent a fraction of our ultimate output.”
The UAE commands the eighth-largest oil reserves globally, with an estimated volume of 100 billion barrels. Venezuela holds the leading position with 304 billion barrels, followed closely by Saudi Arabia with 298 billion barrels. In comparison, the United States possesses 69 billion barrels. When a nation ranked eighth in terms of oil reserves commences the construction of a nuclear power generation capacity surpassing 5 gigawatts, it sends a resounding message regarding the inclination to engage in long-term investments in the oil and gas sector. This action underscores the initiation of the global energy transition. Should the world’s major oil producers curtail their investments in oil infrastructure, an ironic consequence may unfold—an abrupt, nonlinear surge in hydrocarbon prices—due to the collective effort of reducing our dependence on such resources.
“Deliberate on the individual merits of each emirate,” advised the leader of a prominent family office within the nation, a highly accomplished individual in their mid-30s, educated at an Ivy League institution. Our conversation took place within the confines of a WeWork tower, an innovation hub that he played an instrumental role in establishing, soon to accommodate a staggering 3,200 workstations. With a touch of lightheartedness, he proclaimed, “Regardless of your choice, I will be content, for I am a republican,” expressing his satisfaction with a victory for the United Arab Emirates, regardless of which of its seven emirates emerges triumphant. However, he confidently asserted, “Yet, I believe you will discover that Abu Dhabi is the emirate where you will want to establish your most significant presence.” Meanwhile, his team of investors and infrastructure consultants engaged in a healthy competition with their counterparts in Dubai.
Anecdote: My initial journey to the UAE transpired in the early months of 2001, as I assumed the leadership role in a technology project situated in Sharjah, one of the seven emirates. Our operations were housed within a windowless warehouse situated in the airport precinct—a tax-free zone meticulously crafted to entice aspiring entrepreneurs. During that era, skyscrapers sprouted intermittently and abruptly, separated by vast expanses of desert, all connected by wide, desolate highways. Fast forward 22 years, and the UAE stands transformed, fuelled by boundless ambition and unwavering execution. It now stands on the cusp of becoming a 21st-century equivalent of Switzerland—an open sanctuary that welcomes all, aligned with none—an indispensable crossroads where the East harmonises with the West.
“Do you observe that vista?” inquired a sovereign wealth fund investor this week, gesturing toward the northern direction beyond the window of the tower. “Just two miles away lie 100 billion barrels of proven reserves, an abundance that can sustain us for over two centuries,” he remarked, as the panoramic view of the Arabian Gulf unfolded before us, adorned with powder blue hues, sandy islands, and rotating cranes. I had posed the question regarding the driving force behind the UAE’s assertive actions and its resolute commitment to transforming its economy. I also sought to understand the factors that contributed to the UAE’s extraordinary progress, particularly in contrast to Kuwait, which appeared relatively stagnant in comparison.
“In the span of 20, maybe 30 years, all that oil will lose its value,” he declared. “The energy transition is already underway, and we have wholeheartedly pledged to achieve Net Zero by 2050.” The UAE, with a population of approximately 1.5 million citizens and 8.5 million expatriates, boasts a staggering $1.5 trillion in sovereign wealth fund investments. Fuelled by an ardent desire for diversification and reinvention, the nation races against time to redefine its economic landscape. He reflected on Kuwait’s plight, acknowledging the devastation wrought by the war with Iraq, which hindered their complete recovery. However, his focus remained fixed on the future of his own nation.
“For years, we have strategically invested worldwide, yielding robust financial returns, while introducing crucial technologies to our shores and creating an environment conducive to the growth of young enterprises. We constantly seek synergistic opportunities,” he affirmed. “I am akin to a chameleon, adapting my appearance to suit various contexts. In this setting, I am attired in this manner, while in Silicon Valley, jeans and a t-shirt are my garb. Whether in New York, Taipei, or anywhere else across the globe, our strategies have gained momentum, propelled further by geopolitical tensions between the United States and China, followed by the advent of the Covid pandemic and the situation in Ukraine. Consequently, we are witnessing a deluge of people, businesses, and an abundance of promising opportunities.”
