The growth of fund administration in ADGM & DIFC: key insights for fund managers
Fund administration in the UAE is booming. In 2024, AUM in DIFC surged by 58% to $700b, while ADGM recorded a 226% increase in the first half of the year. As global investment activity rises, fund managers increasingly choose ADGM and DIFC for structuring and scaling their funds.
To explore these opportunities and challenges, we spoke with Charles Rix, our Middle East fund admin lead, who brings extensive experience in fund structuring, regulatory compliance, and governance in the UAE. Here are his key insights on why fund managers are choosing these financial hubs and how they can navigate the regulatory landscape.
What’s driving growth in ADGM and DIFC?
Both ADGM and DIFC have become attractive due to their internationally recognised legal frameworks. Although, both operate under common law, there are important differences. ADGM applies English Common Law directly, which is familiar to global investors and reduces legal uncertainty for fund structuring, investor agreements, and dispute resolution. By contrast, DIFC follows its own set of laws that, while based on common law, do not directly incorporate foreign legislation - instead, it employs a predefined legal hierarchy with English law as the fallback.
In addition to legal clarity, both centres are governed by robust regulatory bodies - ADGM by the Financial Services Regulatory Authority (FSRA) and DIFC by the Dubai Financial Services Authority (DFSA). Their clear frameworks ensure funds operate efficiently while meeting international standards such as FATF anti-money laundering requirements and OECD tax transparency rules.
Moreover, both jurisdictions offer competitive tax policies, with 0% corporate tax on most fund structures, making them cost-efficient alternatives to other international financial centres. Their global connectivity also provides direct access to institutional investors, family offices and private equity (PE) firms across Europe, Asia and the US.
What are the key differences between ADGM and DIFC?
While both jurisdictions offer strong environments for fund administration, they cater to slightly different investor profiles.
ADGM is renowned for its flexible fund structuring options, attracting a wide range of funds from PE and VC to alternative investments. Initiatives by the FSRA to streamline fund registration and promote innovation have led to a 226% surge in AUM in early 2024, with 112 asset and fund managers overseeing 141 funds. (ADGM official H1 2024 results)
DIFC, however, has a long-established reputation as a global financial hub, drawing a diverse mix of financial institutions. Its network of banks, law firms and other professional service providers makes it ideal for funds aiming to attract global investors. As of 2024, DIFC hosts over 370 wealth and asset management firms, including more than 50 pure-play hedge funds, with 44 in the 'billion-dollar club'. (DIFC’s official H1 2024 results). (Dubai Media office).
Fund managers should assess their investment strategies, investor bases and compliance requirements to determine which jurisdiction aligns best with their objectives, and our team is well-placed to advise on this.
What are the biggest challenges fund managers face?
A primary challenge is understanding the specific regulatory and compliance obligations of each jurisdiction. Fund managers must meet licensing requirements, governance standards and investor reporting obligations under the supervision of either FSRA or DFSA.
Operational demands such as regulatory reporting, fund accounting, and maintaining ongoing compliance are also significant. Many managers, particularly those new to the region, opt to outsource fund admin and compliance functions to streamline operations and mitigate risk.
Raising capital remains difficult in the current climate. Fund managers who gain the most traction, particularly with institutional investors, are those who show a strong commitment to the region by establishing a local presence. This 'boots on the ground' approach strengthens their investment strategy and signals genuine dedication to the area.
For instance, a PE firm setting up in ADGM initially faced licensing delays due to unfamiliarity with FSRA requirements. With expert guidance, they refined their structure and fast-tracked approval, enabling them to onboard investors within their original timeline.
How does Praxis support fund managers?
At Praxis, we simplify the complexities of ADGM and DIFC regulations so that fund managers can focus on their investment strategies. We provide a comprehensive range of services from fund structuring and setup (ensuring efficient incorporation and regulatory approvals) to regulatory reporting, compliance policy development, and overall adherence to FSRA and DFSA requirements.
Our team also offers fund accounting and financial oversight to ensure accurate reporting, alongside domiciliation and investor services to support sound governance. Many fund managers, particularly those new to the region, rely on our expertise to streamline operations and reduce regulatory risks.
What advice would you give fund managers?
Fund managers should start by assessing their investment objectives, target investors and regulatory requirements to determine whether ADGM or DIFC better aligns with their strategy. Building an effective governance and compliance framework from the outset is crucial. Partnering with an experienced fund administrator like Praxis helps managers stay compliant while focusing on fund growth. Finally, maintaining awareness of regulatory developments and market trends in both jurisdictions is essential to stay competitive and capitalise on new opportunities.
If you’d like to discuss your fund administration needs, contact Charles Rix or Dan Toft – or get in touch with us directly here.
PraxisIFM Trust Limited is authorised and regulated by the Financial Services Regulatory Authority.
Please note that this article is intended to provide a general overview of the matters to which it relates. It is not intended as professional advice and should not be relied upon as such. Any engagement in respect of our professional services is subject to our standard terms and conditions of business and the provision of all necessary due diligence. © Praxis 2025