Abu Dhabi wealth funds are recruiting and creating more holders of the Chartered Financial Analyst designation than any other employer in the Middle East as they seek greater control over how the emirate’s wealth is managed.
The Abu Dhabi Investment Authority employs about 130 CFAs, a person with knowledge of the matter said, asking not to be identified as the information is private. Abu Dhabi Investment Company has at least 51. That makes them the two largest employers of CFAs in the region, according to rankings provided by the Charlottesville, Virginia-based CFA Institute.
The concentration of CFAs in Abu Dhabi speaks to the power of an array of sovereign funds in the city charged with investing hundreds of billions of the nation’s oil-generated riches. ADIA trails only Norway as the world’s largest sovereign wealth fund and still relies on outside managers for most of its investments. Other funds, such as Aabar Investments PJSC and Mubadala Development Co., are better known for taking direct stakes in companies such as Glencore Plc.
“Abu Dhabi is aiming at establishing an asset management industry in the U.A.E. that will be based in Abu Dhabi rather than Dubai,” Apostolos Bantis, a Dubai-based credit analyst at Commerzbank AG, said by phone on June 16. “CFAs are welcomed into the asset management world.”
ADIA employs 1,650 people from 60 countries. Some CFAs are U.A.E. nationals who work for the fund as part of a graduate program and are required to pass at least the first of three CFA tests, according to the person familiar. Holders of the CFA work in both investment and back-office roles, the person said.
The qualification is pursued by finance industry workers seeking better jobs, higher salaries and a deeper understanding of subjects including securities valuation and portfolio management. A record 159,889 candidates registered in June for exams, with those in the Middle East and Africa accounting for one in five of those candidates, according to the CFA Institute.
While the numbers are rising, those seeking a role at a traditional investment bank confront an industry grappling with more regulation, higher capital requirements and diminishing returns in the aftermath of the financial crisis, which has cost thousands of financial jobs, from Madrid to New York. Half the new growth is expected to come from financial institutions from developing countries using Dubai as a gateway to tap markets in South Asia, the Middle East and Africa.
HSBC Holdings Plc is cutting 25,000 positions and Standard Chartered Plc 4,000 at its consumer banking business, the two banks said in recent months. The latter is the highest-ranked bank in the Middle East as an employer of CFAs, with 37, with HSBC fourth at 35, according to the CFA Institute. The number is probably higher because reporting the place of employment back to the institute is voluntary. The bank didn’t respond to requests for comment.
Other organizations in the top 10 list of those employing CFAs in the Middle East were PricewaterhouseCoopers, Saudi Arabian Oil Co., Emirates NBD Group, National Bank of Abu Dhabi and Abu Dhabi Commercial Bank. No U.S. banks featured on the list.
Abu Dhabi, for its part, is seeking to turn the emirate into a regional hub for asset management and lure major investment funds to the city. Abu Dhabi Global Market, the emirate’s new financial freehold built on Al Maryah Island, is set to start offering licenses to financial institutions later this year. Dubai is the de facto hub for the region.
The Dubai International Financial Centre, set up in 2004, is aiming to increase the overall workforce at the tax-free business park to 50,000 from 17,860 and boost assets under management to $250 billion from $10.4 billion in a decade.
Abu Dhabi is home to 6 percent of the world’s proven oil reserves. It uses the various wealth funds as part of its effort to diversify income from oil and to save up for future generations. Government withdrawals from ADIA “have occurred infrequently and usually during periods of extreme or prolonged weakness in commodity prices,” according to its annual report.