As missiles and drones flew over the United Arab Emirates, traders and Wall Street executives who’ve flocked to the Gulf in recent years found themselves confronting a threat few expected to materialise in a country that had pitched itself as the region’s safest hub.
Several hedge funds began reviewing business-continuity arrangements almost immediately, according to people familiar with the matter. Global banks including JPMorgan Chase & Co. and Citigroup Inc. instructed employees to work from home, while other firms urged staff to shelter in place and avoid sensitive areas around foreign embassies and military installations.
Air defence systems have intercepted projectiles over the skylines of Dubai and Abu Dhabi over the weekend, with debris and smoke visible near high-profile commercial districts and luxury developments including Palm Jumeirah.
A suspected aerial strike damaged facilities at Dubai International Airport, while debris from an intercepted drone struck a building facade at Etihad Towers, a site housing diplomatic missions in the UAE capital.
The attacks, part of an unprecedented Iranian response to US and Israeli strikes that killed Supreme Leader Ayatollah Ali Khamenei, punctured the long-nurtured perception that the UAE was insulated from the volatility of its neighbourhood— an image that has underpinned its rapid rise as a magnet for hedge funds, private capital and global banks.
On Saturday night, Singapore-based hedge fund Dymon Asia Capital’s senior executives jumped on a call to work out—among other things—what to do if the conflict spiralled into full-on war. Deputy Chief Executive Officer and Managing Partner Kenneth Kan, who like most Singaporean men had served in the country’s armed forces, helped draft guidelines eventually sent to staff across the region.
Aside from its office in Dubai International Financial Centre with 17 employees, it also had other staff stuck in transit as flights were canceled and airspace closed. The measures are mostly common sense, recommending employees stay indoors and away from glass windows, military installations and large public gatherings. Affected workers are now checking in daily and maintaining a roster so the firm can track their travels and assist where needed; hotel rooms have been booked for those unable to leave the city.
“We previously had to deal with covid and the Hong Kong riots but in terms of wartime related safety issues, this is a first,” said Kan.
Over the past couple of years, Dubai has emerged as a fast-growing hedge fund hub. The DIFC now hosts more than 100 firms, including Millennium Management and ExodusPoint Capital Management, while others, like Ken Griffin’s Citadel, have outlined plans to expand there.
Abu Dhabi is also scaling up, with Hudson Bay Capital Management, Marshall Wace and Arini setting up offices, and an entity based in the emirate taking a minority stake in Brevan Howard Asset Management.
Contingency plans
While the initial expectation among some executives had been that tensions would ease quickly, the breadth of the attacks forced firms to rethink. Some hedge funds worked with employees to secure hotel accommodation outside the DIFC, and others explored evacuation routes via Muscat in Oman, which was spared from the strikes until earlier on Sunday.
International financial institutions moved cautiously, balancing staff safety with the need to provide business continuity to clients.
A Citigroup representative said it is taking steps to keep employees and their families safe, while continuing to serve clients, backed by robust contingency plans. JPMorgan said staff will work from home for the next 48 hours as it assesses the situation. BlackRock Inc. said its immediate focus is ensuring staff and clients are safe and have the support they need.
At least one large asset manager in the region said their leadership was in touch with officials in Abu Dhabi, who reassured executives that authorities would take necessary measures to safeguard residents and businesses.
“It’s a very serious situation, and we’re all taking extra precautions and being mindful of what’s happening around the region,” said Kish Desai, who moved from London to Dubai last year to open at Tourmaline Partners. “The UAE is doing an incredible job in terms of defending itself and its residents and I think the vast majority of people continue to feel safe here. We all hope the situation will resolve itself quickly and is just a short term blip.”
Still, the mood across the UAE’s commercial centers was subdued. Roads in both Dubai and Abu Dhabi were unusually quiet for a weekend, with many shops closed even as delivery services and taxis continued operating.
Authorities advised residents to work remotely, defer business travel, limit unnecessary movement and follow official guidance. Supermarkets saw bouts of panic buying, prompting the government to urge people not to stockpile and stressing that strategic reserves of essential goods remained robust—even as some shelves were temporarily stripped of staples.
Global aviation was heavily disrupted, with key transit points in the UAE and elsewhere in the Gulf, including Qatar, facing closures or severe restrictions. Authorities moved to help stranded passengers, urging hotels to extend stays and agreeing to cover hosting and accommodation costs.
Still, with flights grounded, some travelers sought other options to leave the UAE. Hussein Nasser-Eddin, chief executive of Dubai-based security firm Crownox, said it evacuated scores of high-net-worth individuals and chief executives across the border into Oman. “Most requests we are getting are from the UAE to Oman and also from Qatar to Saudi, over land,” he said.
First real test
The events threaten both Dubai’s emergence as a hedge-fund hub and Abu Dhabi’s expansion as a sovereign-wealth powerhouse — twin ambitions built on a reputation for stability that drew capital during the Arab Spring, the pandemic and the post-Ukraine influx of wealth.
That carefully cultivated “safety premium” is now being dented. Some executives told Bloomberg News that the pace of people coming in could slow if instability persists, with contingency plans like relocation options already being discussed.
Others struck a more measured tone, telling colleagues and family abroad that daily life remained functional despite dramatic images circulating online, pointing to operating transport networks and open restaurants. A hedge fund executive watching missiles being intercepted from a hotel bar on Sunday said his fellow patrons were similarly unfazed, noting those hailing from Russia in particular are familiar with such situations.
But Hasnain Malik, head of emerging-markets equity and geopolitics strategy at Tellimer, said the scale of escalation heightened regional risks, adding that Dubai’s asset prices in particular could be exposed given how rare such disruptions have been and how elevated valuations became after a strong post-pandemic rally.
Property prices in Dubai have surged about 70% over four years, while Abu Dhabi has deployed vast sovereign capital in global dealmaking as the Gulf competed with financial centre globally to attract talent and assets.
Some executives argued that the UAE has historically managed to turn crises into catalysts for growth and expect it to do so again, noting how swiftly it reopened during Covid-19 and absorbed capital flows following Russia’s invasion of Ukraine.
And some headhunters said professional opportunity and tax advantages may, over time, outweigh security concerns for many expatriates already embedded in the ecosystem. But that thesis could be tested by one critical factor: How long the attacks last.
As one executive put it, a prolonged period of disruption risks challenging one of the UAE’s central propositions — that it offers certainty in an uncertain region. Viswanathan Shankar, a former top executive at Standard Chartered Plc and founder of Gateway Partners, sounded an optimistic note.
“I don’t anticipate UAE’s standing as a rising financial centre to be impacted,” he said. “Historically, UAE has been brilliant at converting every crisis into an opportunity. I expect the same will happen.”
