Blackstone opens Dubai wealth office to chase Gulf money

The latest:

Blackstone, the world’s largest alternative investment manager, has opened a wealth management office at Dubai International Financial Centre to serve as its regional hub, the firm said on Thursday. The nearly $1.4-trillion investor said the base will help it court wealthy clients, family offices and institutions across the Gulf. President and chief operating officer Jon Gray said the UAE has built an extraordinary position as a global finance and investment hub.

Details:

• The new base: The DIFC outpost will act as the regional hub for Blackstone’s private wealth business, targeting high-net-worth individuals, institutions and family offices in the Gulf and beyond. The firm said the office expands its reach across the wider Middle East.
• The scale: Blackstone manages close to $1.4 trillion in assets, making it the largest alternative investment manager globally. It has maintained a presence in the UAE since 2010, and Gray said the Dubai office builds on that long-standing commitment to the market.
• Distribution network: The private wealth unit is building on partnerships with leading regional banking institutions and has already established more than 40 distributor relationships across the region, according to the company. It did not name the banks involved.
• Gray’s framing: Blackstone’s president said the new office allows the firm to “deepen our partnerships and broaden access to alternatives” for investors in the region, adding that the UAE is becoming an increasingly important centre for wealth management.
• Abu Dhabi track: The Dubai office adds to Blackstone’s existing presence in Abu Dhabi Global Market. The firm said it has upgraded its Abu Dhabi office licence to boost deal origination across the region, a step aimed at sourcing transactions closer to the capital.
• Kuwait next: Blackstone said it plans to open an office in Kuwait and expects to further expand regionally over the coming year. The company did not give a timeline for the Kuwait launch or say how many staff the new offices will carry.
• Capital commitment: Chief executive Steve Schwarzman told The National last month that Blackstone has committed more capital to the Gulf over the past 12 months than at any point in its history, and plans to invest more despite the continuing US-Iran conflict.
• Growth target: Schwarzman said the investment appeal of the Gulf remains intact despite the months-long war, and that the firm aims to substantially grow the share of its assets under management in the region by the turn of this decade. No percentage target was given.
• The wider trend: Blackstone is the latest global money manager to expand in the Arab world’s second-largest economy. Both DIFC and ADGM have attracted a steady flow of international financial institutions and trillion-dollar asset managers over recent quarters, despite geopolitical headwinds.

Background:

DIFC is Dubai’s onshore financial centre and ADGM its Abu Dhabi counterpart. Both operate separate legal and regulatory regimes designed to attract international financial firms, and have competed for global asset managers seeking a Gulf base.

Between the lines:

The sequencing points to a distribution play rather than a deal-making one: more than 40 distributor relationships and a dedicated wealth hub suggest Blackstone is positioning to raise regional money, while the upgraded Abu Dhabi licence handles origination. Schwarzman’s comments on record capital commitment despite the US-Iran conflict indicate the firm is treating regional risk as priced in.

What’s next

Watch for the Kuwait office opening and any disclosure of Blackstone’s Gulf assets under management against Schwarzman’s end-of-decade growth target, plus further distributor agreements with regional banks.