Nuveen joins garden of asset managers to open Abu Dhabi office

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Nuveen is to open its first Middle East office in Abu Dhabi, becoming the second investor with more than $1 billion in assets to announce a bet on the new financial center this month.

The oil-rich emirate, which is home to at least $1.5 billion in sovereign wealth funds, is betting that attracting financial services firms to the city will further diversify the economy and reduce fossil fuel revenues.

Nuveen, the wholly-owned subsidiary of US teacher pension fund TIAA, with $1.2 billion in assets under management, will initially open a three-person office to handle its institutional clients in the region. It will be headed by former Columbia Threadneedle Middle East CEO Fadi Khoury.

Nuveen’s head of global client group Mike Perry said contributing to the expansion of the Abu Dhabi financial center would give the asset manager a competitive advantage.

“The entire financial market in Abu Dhabi is becoming much more complex and structured. It’s not just flying in and out for one client and one equity fund,” Perry told the Financial Times.

“We’re reaching this tipping point where if you’re going to win over time, I think you’ve got to be there to help that market grow, to be there,” he said.

Nuveen is the second major US asset manager to announce a new office in Abu Dhabi this month, following PGIM less than two weeks ago.

The group has registered and obtained a license from the offshore financial center Abu Dhabi Global Market (ADGM), which it says now houses 112 fund and asset managers. It did not disclose the value of the assets managed within the financial center.

Although competition is growing from Abu Dhabi, the neighboring emirate of Dubai is still the region’s largest financial centre. The Dubai International Financial Center says $165 billion worth of assets are managed within it.

The Gulf region’s largest economy, Saudi Arabia, is also trying to expand its financial center, with the aim of getting so-called suitcase bankers to move to Riyadh.

But Perry said Nuveen chose to open its first Middle East office in Abu Dhabi, which markets itself as the “Capital of Capitals,” because its main clients in the region are there.

“I wouldn’t say there’s been any sort of attraction (of Abu Dhabi) other than it’s easy to do business,” Perry said.

But he said whether Nuveen expands its Abu Dhabi office will depend on whether it starts investing in the region, in assets such as real estate, rather than just managing customer relationships.

“The real question is whether we invest in the land there with assets,” Perry said. “It’s more opportunistic and that would probably lead to a bigger footprint there.”

Nuveen’s clients in the Middle East are looking to diversify away from traditional assets, Perry said, with high demand for loans from leveraged finance to energy transition debt. “The private debt, higher yield space is where we’re seeing a lot of interest,” he said.