BlackRock, a manager with $11.4tn of assets under management, has been awarded a commercial license by the emirate to cement its access to local wealth funds and propel it further into the Middle East.
The company is also obtaining licenses to offer its services in the Abu Dhabi Global Market, a leading financial center in the UAE that has attracted numerous financial and crypto firms.
Charles Hatami, BlackRock’s head of Middle East operations, added that the strategic transformation of Abu Dhabi into a global financial powerhouse is crucial to the firm.
“Abu Dhabi is aiming to become one of the most important financial hubs globally,” Hatami said, referring to the capital’s efficient investment in Artificial intelligence structures and Sustainable Investment platforms. This fits with the capital’s goals of rising as a rival to other emerging cities for business, such as Dubai or Riyadh.
Abu Dhabi’s Growing Appeal and BlackRock’s Strategic Expansion into the Middle East
Abu Dhabi has dramatically improved its approach to seeking global capital in recent years, especially in AI and digital finance. For example, in late 2020, Microsoft pledged $1.6 billion to G42, an artificial intelligence technology holding company in the city.
Although BlackRock has not announced any investments in digital assets in Abu Dhabi, its global actions regarding emerging platforms and technologies like AI point to the firm entering the Middle Eastern market, which has recently opened to crypto.
Altmüller said BlackRock plans to enter the Middle East to gain a foothold in the wealth management and investment industry. Other ongoing activities at the firm include sustaining leadership in the region. Recently, Mohammad Alfahim was named UAE Business Head in BlackRock, and Ben Powell assumed the position of the newly formed Chief Middle East and Asia Pacific Investment Strategist.
The decision came after BlackRock started to pay more attention to cryptocurrencies and other digital assets. In the iShares product line, just recently, the iShares Bitcoin Trust (IBIT) surpassed Net Asset compared to the iShares Gold ETF (IAU) as of 7 November 2021, with $33.17 Billion.
The Bitcoin ETF, which has been in operation for less than one year, recorded $1.1 billion in one day when it reached a record high of $76,943. These changes align with market trends and place BlackRock at the center of future crypto and blockchain markets.
Besides those in Abu Dhabi, BlackRock plans to open regional headquarters in Riyadh, backed by $5 billion from the Saudi PIF. The firm has previously worked with Abu Dhabi, Sheikh Tahnoon bin Zayed Al Nahyan, when funding data warehousing and energy.
Also, the firm’s involvement with digital finance grows; BlackRock opened up access to its Blackrock USD institutional digital liquidity fund/buidl, the largest and first fully regulated tokenized RWAs fund.
To further strengthen its position on such blockchains, the fund has expanded from five to ten blockchains, namely, Aptos, Arbitrum, Avalanche, Optimism’s OP Mainnet, and Polygon. The BUIDL has already secured more than $520 million in deposits, and U.S. Treasury bills back it.
While it deepens its market share in the Middle East, BlackRock may set the region on a new frontier of cryptocurrency and digital finance. Given that the firm is strategically located in Abu Dhabi, it is well-positioned to change the dynamics of the wealth management industry in the region and explore some of the technologies defining new wealth management markets worldwide.
