According to Bas Kooijman, CEO and Asset Manager of DHF Capital S.A., more than half of the family offices established in the United Arab Emirates were founded with the intention of protecting wealth. This information is based on a recent KPMG study of 625 family office specialists. Bas discusses the driving forces behind the market’s explosive growth and the reasons why the nation’s financial wealth is expected to increase 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.
New Family Arrangement Regulations were also implemented by the Dubai International Financial Centre (DIFC) in January 2023 as a way to support the increasing number of domestic and foreign family enterprises setting up shop there. To further support the family office scene in the UAE, the Global Family Business and Private Family Wealth Centre was introduced in March.
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.
Different family offices in the UAE and Europe receive counsel and direction from Bas’ securitization company, DHF Capital. Since its start, DHF has delivered an average annual ROI of 23% under Bas’ leadership. A minimum average ROI of 86% and more than 48 straight months of positive returns have been experienced by investors who have worked with Bas since the company’s founding four years ago, more than doubling their initial investment.