Al Fardan Exchange CEO Hasan Fardan Al Fardan shares insightful perspectives on family offices and embracing technological innovations. He also tells Economy Middle East about the growing prominence of impact investing.
Economy Middle East: What sectors and investment strategies are promising for family offices today and why?
Hasan Fardan Al Fardan: Family-owned businesses make up 90 percent of private companies in the UAE, according to a report by the UAE Ministry of Economy. They are crucial to the economy and provide employment opportunities for over 70 percent of the private sector workforce. Family-owned businesses also play a significant role in Dubai’s economic diversification. They have a strong presence in various sectors such as real estate, construction, retail, hospitality, tourism, manufacturing, finance, healthcare, education, and technology. A new report by KPMG and Agreus UAE predicts that financial wealth in the UAE, generated by family offices and ultra-high-net-worth individuals (UHNWIs), will increase to 46 percent by 2026. In addition, it forecasts family offices expected to contribute $500 billion to the UAE economy by that year.
In the current financial landscape, family offices have many promising sectors and investment strategies to consider. The technology sector is a front-runner thanks to its continuous innovation and adaptability. Investing in sustainable and green initiatives is gaining popularity, aligning with the global shift towards responsible and ethical investing. Real estate, particularly in emerging markets, provides stability and potential for long-term returns.
Economy Middle East: How do you foresee the future of family offices evolving, and what trends will shape the industry in the coming years?
Hasan Fardan Al Fardan: The UAE’s family offices industry is set to undergo significant changes driven by various trends and factors. The country’s tax-efficient policies, stable economy, strategic location, and numerous free trade zones make it an attractive destination for family offices. The increasing number of millionaires and top investors flocking to the region reinforces its growing popularity as a family office hub. This is due to various factors such as access to skilled professionals and talent, favorable regulatory framework and legal structures. Innovative policies such as the UAE investment and golden visa programs are also contributing factors.
Family offices’ future is poised for evolution, given several key trends. Firstly, there is a heightened focus on ESG (Environmental, Social, and Governance) factors, reflecting a broader societal awareness and commitment to sustainable practices. Family offices express a desire to invest in businesses that align with their values and have a positive impact on society and the environment, indicating a growing interest in impact investing.
Technology will play a crucial role in shaping the industry’s future, with increased reliance on data analytics and artificial intelligence for more informed investment strategies.
Finally, the next generation’s influence is growing, leading to changes in investment strategies and a focus on diversification and wealth enhancement.
Economy Middle East: How is Al Fardan Exchange adapting to the rapidly changing financial landscape and embracing technological innovations?
Hasan Fardan Al Fardan: We recognize the imperative of adapting to the evolving financial landscape, and our approach is anchored in embracing technological innovations. We have strategically integrated advanced digital solutions into our operations to enhance efficiency and customer experience.
Take, for instance, our mobile App, “AlfaPay”, an innovative and secure mobile application for sending money, paying bills, and so many other features, positioning Al Fardan for substantial growth opportunities in the long run.
We believe that by leveraging FinTech, we can enhance our customer experience, promote financial inclusion, and optimize our operations through the use of digital solutions. We take pride in our commitment to serving the country’s diverse population.
Economy Middle East: Amidst increasing globalization, how does Al Fardan Exchange navigate regulatory challenges while expanding its services?
Hasan Fardan Al Fardan: Al Fardan Exchange’s operational strategy strongly emphasizes navigating regulatory challenges in the face of globalization. As a remittance and payment solution company that is licensed by the Central Bank of the UAE, we prioritize compliance with both local and international regulations.
Our commitment to maintaining excellent relationships with major international organizations ensures we can move funds seamlessly within a robust compliance framework. Across all branches, we have implemented world-class Anti-Money Laundering (AML) practices, aligning with guidelines from the Financial Action Task Force (FATF). Upholding the highest standards, we foster trust and transparency in our global financial services by providing timely due diligence information and observing KYC principles.
About Hasan Fardan Al Fardan
Hasan Fardan Al Fardan is the chief executive officer of Al Fardan Exchange. Before joining the group, he held various key positions within the Abu Dhabi Investment Authority (ADIA), where he was pivotal in managing numerous international real estate investments. This experience exposed him to intricate global agreements involving diverse markets and regulatory frameworks across Asia, Europe and the US.
For more interviews, click here.
