IQ-EQ Taps Into Gulf Region's Wealth Bonanza

Tom Burroughes Group Editor 15 January 2024

IQ-EQ Taps Into Gulf Region's Wealth Bonanza

Shortly after announcing new operations in Abu Dhabi, the investor services group talked to this news service about its business approach.

The United Arab Emirates is rapidly gaining renown as a welcoming jurisdiction for ultra-wealthy individuals. IQ-EQ, the investor services group, wants a piece of the pie. 

IQ-EQ was busy last year stepping up its business in the Gulf. It set up in the Dubai International Financial Centre (DIFC) in 2023 and in November said it was establishing operations in Abu Dhabi. The move included acquiring a licence to offer fund administration services.

Considering how the DIFC, for example, has rolled out the red carpet for family offices – putting it up against rival hubs such as Singapore – a presence in the Gulf is a no-brainer. Crafting the specific service mix is where the detail comes in. 

Rehma Imrith, chief commercial officer, Middle East, IQ-EQ, who has been at IQ-EQ for 13 years, explained the firm’s broad strategy to this news service. 

She said that It is important for firms such as IQ-EQ to have “boots on the ground." 

“IQ-EQ operates a three-segment strategy – fund and asset managers, private and institutional asset owners, and debt, capital markets and corporate – which is not the case for our competitors. This means there is a gap in the market which we can fill with our broader offering and service delivery model,” Imrith said.  

There is a gap in the market in the UAE for fund administration where it is part of an integrated offering, she said.

There’s plenty of commentary on how much business is moving to the Gulf. More than 5,000 special purpose vehicles (SPVs) – structures for holding business and forms of wealth – exist in the Abu Dhabi Global Market (ADGM) compared with just 46 in 2016, according to data compiled by M/HQ, a wealth advisory firm (source: Bloomberg, 11 December 2023). SPVs are types of holding companies that manage wealth. In Abu Dhabi, SPVs can contain assets such as property and equity.

The wealth of the region gives IQ-EQ plenty of justification to want to be there. It is joined by a host of Western and local players such as Citi Private Bank, to give an international example, and Emirates NBD and QNB – to name two locals. The UAE is the largest wealth market in the Middle East and the 26th largest worldwide (in terms of total wealth held). People living in the UAE together hold $925 billion in net assets. Around $470 billion (or 51 per cent) of that is held by high net worth individuals. In all, there are about 88,700 HNW individuals living in the UAE (source: Boston Consulting Group, 2022).

With intergenerational wealth transfer a big topic in the Gulf, coupled with a need to establish structures to safeguard liquid and business interests, there’s much for IQ-EQ to do, Imrith said. 

“We see the private wealth space evolving. Family businesses are getting more sophisticated and are looking at professionalising [their] affairs and are becoming investors, not just operating businesses,” Imrith said. “They [clients] want more sophisticated services: they want to be LPs rather than joint operators of a family business…therefore there is a need for more professionalisation.”

Being able to offer services that work for both the private clients and fund managers is important. Private clients are becoming both LPs and GPs of private funds, she said. 

“It’s a relationship that is built on trust and there’s often education that needs to happen. Subjects like estate planning and proper governance become more important as family wealth structures become larger and more complex,” Imrith continued.

To work in this market and build business requires considerable patience and understanding of the culture. Among client segments, there are a lot of Indian families in the UAE. In the past, they might have been more inclined to go to London.

“From a structuring point of view, we see the UAE as becoming more important,” Imrith continued. There are also more European clients moving to the UAE. “A lot of them have regional headquarters or trading companies in ADGM and DIFC.”

This news service continues to develop coverage of the Gulf and wider Middle East wealth sector, including the ways firms are increasing services for women.

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