[Edaily Marketin Soyoung Park Reporter] The global investment banking (IB) industry is turning its attention to the Middle East, home to the world’s largest sovereign wealth funds. “Oil Drive” is a series covering news from the Middle Eastern investment market. It covers stories of global investment firms diving into “oil money” as well as news from the Middle East itself, where local players are seeking to move away from oil dependence and focus on investments in new technologies. It also reports on South Korean companies attracting capital from the Middle East. [Editor’s Note]

Despite the protracted U.S.-Iran conflict, an increasing number of global asset management firms are opening offices in Dubai, United Arab Emirates (UAE). Not only are firms opening offices to enter the Middle East and North Africa (MENA) region for the first time, but those already established in the region are also setting up shop in Dubai. All eyes are on whether Dubai will further solidify its position as a hub attracting global capital, even amid the risks of war.

According to the global investment banking (IB) industry on the 29th, the number of companies that opened offices in Dubai and began operations in the first half of this year exceeded that of the second half of last year. The Dubai International Financial Centre (DIFC) announced that 1,506 companies newly registered in the first half of this year, a 39% increase compared to the same period last year. In the second half of last year, 812 companies were newly registered. As a result, the number of global companies officially registered and operating in Dubai has surpassed 10,000.

The number of capital market participants registered and operating in the DIFC has also increased. The DIFC announced that the number of regulated financial firms—including banks, asset management firms, insurance companies, and securities firms—rose by 16% over the past year, reaching a total of 1,134.

Among these, a significant number of global private equity (PE) and alternative investment managers have opened new offices in Dubai, UAE, this year. For example, France’s Varenne Capital and the U.S.’s Oak Hill Advisors (OHA) announced their move to the DIFC last month, while Singapore-based Gordian Capital announced its move in May.

According to foreign media outlets such as Reuters, Blackstone, the world’s largest private equity firm, is also reportedly moving forward with plans to establish an office in Dubai. Blackstone left Dubai in 2019 and set up a new base in Abu Dhabi. This plan to establish an office in Dubai signifies a re-entry into the market. Industry observers interpret Blackstone’s plan to return to Dubai as a strategy to solidify its position by opening an office in the Gulf Cooperation Council’s (GCC) largest financial hub.

Global capital market participants cite “accessibility” as the primary reason for opening offices in Dubai. The aim is to establish a presence in Dubai, the UAE’s financial hub, and increase access to funds from sovereign wealth funds and family offices. Last year, approximately 9,800 millionaires settled in the UAE. It is estimated that a significant number of them reside in Dubai. Analysts note that as high-net-worth individuals and family offices have moved into the region, global capital market players have followed suit to secure them as clients or limited partners (LPs).

This move also reflects efforts to secure investment opportunities as major countries in the MENA region pursue economic diversification policies and foster non-oil industries. A local industry official stated, “While the war is slowing down deals in the short term, it appears that companies are establishing local offices in advance from a long-term investment perspective,” adding, “The escalating tensions in the region do not seem to be affecting the long-term strategies of global companies seeking to establish a foothold in the Middle East.”