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by Arron York, Managing Director & Co-Founder
- 750+ new jobs created in UAE since 2020 in booming sector, whilst staying away from the mainstream business headlines.
- Job creation across trading, middle office, back office, trading technology, and quants.
- 70% of jobs are greenfield/newly created, 30% of roles relocated to UAE from overseas.
- Majority of roles are middle to high earners.
- Primarily private sector growth, not linked to GRE's or Government support.
- Further job growth expected in 2024, both from direct hiring, and as third party service providers look to catch up.
Over the past twelve to eighteen months, much fanfare has been made by the international financial press over the UAE’s success, and more specifically the DIFC (Dubai International Financial Centre), in attracting a host of the world’s leading hedge funds and money managers to the emirate.
However, whilst the international press lime-light has been stolen by the global “multi strats”, and the brotherly rivalry between the DIFC and the ADGM, both competing to attract the world’s largest hedge funds, Dubai has achieved significant growth in the Commodities Trading market.
Commodities Trading is an industry with discretion at its core, often operating in the shadows, not subject to the same level of regulation or market supervision as banks and funds. Usually managing propriety capital, trading houses typically see no use in issuing press releases or making their business moves known. Often operating within a paradox; seeming that everyone in the industry knows each other (as competitors are often trading counterparts), whilst ensuring that any commercial advantage is not lost to said trading partners by keeping plans around hiring, expansion, and strategy quiet.
The centres of power in Commodities Trading have long been concentrated in Geneva (where Swiss privacy laws have served well for the nature of Commodities traders), London, and Singapore.
However, the past 12-24 months has seen a shift in the tide, with Dubai elevating it’s position on the global Commodities Trading landscape, from regional outpost with a handful of traders (often only here for political or strategic reasons), to a fully-fledged trading hub to rival Geneva. Bloomberg has gone as far as describing the UAE as “the new Switzerland”, and the FT describing Dubai as “the new Geneva” for Russian oil trading.
The DMCC (Dubai Multi Commodities Centre) was launched in 2002 to enhance commodity trade flows through Dubai. Whilst effective to a point with the DGCX, Diamond Exchange, and Coffee Centre all establishing a local platform to catalyse the market, much of the DMCC’s business has been non-commodities firms.
A shift in the tide began with ADNOC seeking to bring a considerable chunk of the value chain into Abu Dhabi, with the launch of ADNOC Trading & Global Trading– a project which at launch required hiring around 200 professionals across Trading & Front Office, Middle Office, and Back Office, further supplemented by the ICE exchanging opening an Abu Dhabi based exchange to support the development of the market.
The greenfield job creation has been only in small part down to government funded projects. Dubai has seen privately owned commodities firms launch in the DMCC and in the DIFC. From newly formed physical trading houses moving commodities around the world, to cutting edge systematic trading firms, hiring software developers, quantitative analysts, and algorithmic traders to use high frequency trading algorithms to time and trade global markets hundreds of times a second.
Alongside this, the last couple of years has seen global macro events position Dubai as a perfectly situated hub for the future of Commodities Trading for those looking to relocate either out of desire or necessity.
Similarly to the drivers for the hedge fund boom in Dubai, Covid-19 & global lockdowns led senior traders and businesses to look towards a market which was fast to get back to normality whilst the rest of the world continued with prolonged lockdowns and restrictions. The proposition of moving made sweeter by lifestyle and tax benefits not available in traditional home markets for commodities traders. Bloomberg reported in May that key figures from Hartree, Freepoint, and Vitol have relocated to Dubai, together with our own research that shows there are several other privately owned international trading houses beefing up their teams in the DMCC and DIFC.
The sanctions introduced on Russian oil following the conflict in Ukraine, led many trading houses to seek neutral territory to base their traders trading Russian energy, or in some cases, their HQ, with Dubai providing the obvious solutions. It has been widely reported that Russian firms such as Litasco have recentred their businesses towards neutral Dubai, with the FT also reporting that non-Russian firms such as Gunvor have incorporated entities in Dubai to trade Russian trade deals.
In DIFC, ICD Brookfield Tower rises above the freezone as home to the influx of money managers to the Emirate, whilst at the other end of town, the newly opened Uptown Tower stands above JLT, already fully occupied, with some of the world’s largest trading houses reportedly having scrambled to sign leases for entire floors of the brand new A-Grade commercial space. A recent press release from DMCC showed amongst others ADM, SOCAR, and a handful of shipping firms as new occupants, however our research indicates other leading trading firms occupying space in the building whilst maintaining a lower profile.
In previous years, the market was mostly made up of satellite offices set up around 1 or 2 traders who either needed to be based in Dubai for political and/or commercial convenience. However now not only the traders and high earners who make the headlines for buying luxury villas are in town, but also those in support functions (middle office/operations/chartering/quants/tech/risk/finance) now have career options in Dubai – able to relocate without having to risk a compromise in career advancement.
Our research shows that since 2020, between 750-1000 new jobs have been created in the commodities sector in the UAE. Around 70% of these roles have been newly created positions, with around 30% being of those who have relocated with their firms from other jurisdictions. There will be a knock on indirect effect of this, as brokers, service providers, and audit firms scramble to position their own teams to ensure that fees generated from these new potential clients are earned locally rather than in London or Geneva.
We expect that this trend will continue as the UAE commodities ecosystem matures, and third-party/non trading firms hire to benefit from this expansion. The Commodities Trading market offers Dubai and the UAE a sound component of the private economy and job market, independent from the need for government funding or support, and often shielded from the same headwinds which the banking sector is exposed to during downturns and recessions, and will go onto flourish within the platform and environment has created (albeit a couple of decades after the inception of the DMCC).
Venture Search www.venturesearch.com
Established in Dubai in 2019, Venture Search currently operates from locations in the UAE, UK, and US. We recruit for global financial services markets across Asia, the Middle East, Europe, and North America. Our coverage spans Investment Banking, Investment Management, Global Markets, Commodities Trading, Hedge Funds & Proprietary Trading, Financial Technology, and GRC (Governance, Risk, & Compliance).