Abu Dhabi Global Market has cemented its position as the Middle East’s premier destination for fund formation, reporting more than 11,000 active licenses and a 42% surge in assets under management during the first half of 2025. The rapid growth reflects ADGM’s success in combining common law principles with progressive regulatory frameworks that appeal to international investment managers.
At the heart of ADGM’s appeal lies its comprehensive FUNDS Rulebook, which provides clear, unified requirements for fund managers operating within the jurisdiction or marketing foreign funds from Abu Dhabi. This integrated framework covers everything from initial fund authorization through ongoing operational conduct and cross-border offerings, eliminating the regulatory ambiguity that plagues many emerging financial centers.
Mindaugas Suklevicius, Founder and Fund Manager at HF Quarters, points to the regulatory clarity as a decisive factor for managers choosing where to domicile funds. The jurisdiction’s approach differs markedly from fragmented regulatory environments where managers must navigate multiple rulebooks and conflicting interpretations. Instead, ADGM offers a single source of truth for compliance requirements.
Venture capital managers have received particularly strong support from ADGM’s Financial Services Regulatory Authority. In December 2023, the FSRA issued detailed guidance specifically for fund managers of venture capital funds, outlining the process for obtaining Financial Services Permission and specifying expectations for both new and experienced VC managers. The goal was straightforward: streamline and simplify what can often be a labyrinthine licensing journey.
The guidance document clarifies the regulated activity of Managing a Collective Investment Fund and provides step-by-step authorization procedures. For an industry where regulatory uncertainty can delay fund launches by months, this level of transparency represents a competitive advantage that helps ADGM attract managers who might otherwise choose established jurisdictions like Luxembourg or the Cayman Islands.
Where ADGM truly differentiates itself is in private credit. In May 2023, the FSRA introduced a dedicated regulatory regime for Private Credit Funds accompanied by detailed operational guidance. These provisions, now incorporated into the FUNDS Rulebook, address investment eligibility criteria, risk diversification requirements, leverage restrictions, disclosure obligations, reporting standards, and governance systems.
What makes the private credit framework particularly noteworthy is its tailored approach to managers focused on origination and direct lending strategies. Rather than forcing all credit managers into generic fund structures, the regime accommodates the specific operational needs of direct lenders while maintaining robust investor protection standards. This flexibility enables a wide spectrum of credit-focused approaches under one regulatory roof.
The timing of ADGM’s private credit initiative proved prescient. Global private credit markets have exploded over the past two years as traditional bank lending contracted and institutional investors sought yield in alternative credit strategies. By establishing clear rules early, ADGM positioned itself to capture managers looking for jurisdictions that understand the nuances of private credit rather than treating it as an afterthought.
ADGM’s growth metrics tell the story of a financial center hitting its stride. The jurisdiction now supports over 11,128 active licenses as of mid 2025, representing a 67% increase in new licenses during the first quarter alone compared to the same period in 2024. Assets under management growth of 42% in just six months suggests not only that more managers are choosing ADGM, but that existing managers are scaling their operations significantly.
The jurisdiction operates across Al Maryah Island and Al Reem Island, creating one of the world’s largest financial districts by geographic footprint. This physical infrastructure supports not just fund managers but the entire ecosystem of service providers they require, from legal advisers and auditors to prime brokers and fund administrators. Having these services concentrated in one location reduces operational friction for managers setting up new vehicles.
ADGM’s regulatory structure operates independently from the broader United Arab Emirates framework, giving it flexibility to adopt international best practices without being constrained by federal regulations designed for different purposes. The jurisdiction applies English common law through its autonomous court system, providing fund managers with legal certainty based on centuries of precedent rather than evolving local interpretations.
Tax efficiency remains a key attraction. ADGM offers zero percent tax on corporate income and profits for qualifying financial services companies, with no restrictions on capital repatriation or foreign exchange controls. For fund managers whose investors are scattered globally, these features eliminate layers of tax complexity that exist in many traditional fund domiciles.
The jurisdiction’s success reflects broader trends in global finance. As managers seek to diversify their operational footprints beyond established centers, jurisdictions that combine regulatory sophistication with business-friendly policies are winning market share. ADGM’s ability to attract both new startups and established managers relocating from mature markets demonstrates it offers genuine competitive advantages rather than just lower costs.
Looking ahead, ADGM faces the challenge of maintaining momentum as it scales. Rapid growth can strain regulatory resources and risk diluting the quality of service that attracted managers initially. However, the 42% increase in assets under management suggests existing managers are expanding rather than just new entrants arriving, which points to satisfaction with the jurisdiction’s capabilities.
For investment managers evaluating where to establish their next fund vehicle, ADGM’s combination of clear rulebooks, specialized frameworks for venture capital and private credit, common law certainty, and tax efficiency presents a compelling value proposition. The question is no longer whether ADGM belongs in conversations about leading fund domiciles, but rather which established jurisdictions will lose market share as more managers discover what Abu Dhabi offers.
Source: newsghana.com.gh
