Investor jitters over Gulf tensions are prompting wealthy families and founders to consider shifting capital to rival financial hubs, say bankers and advisers.
Anecdotal evidence suggests that high-net-worth individuals are already exploring moving assets from the Middle East to elsewhere in Asia, with most of them preferring Singapore.
The reassessment comes despite an interim deal between Iran and the United States last month. Renewed attacks have underscored the need for greater diversification in wealth management amid heightened "geoeconomic stress", experts said.
Ian Yoong Kah Yin, a private equity investor and former investment banker in Malaysia, said some of his relatives and acquaintances based in the Middle East returned to their home countries at the start of the Iran war.
"Many contacts in hedge funds, asset management companies and family offices are in the process of relocating to Hong Kong and Singapore," Yoong said. "There is after all a lot of planning and execution involved."
Anthony Rollet, founder and CEO of private equity real estate firm Kane Capital Partners in Indonesia, said escalating tensions in the Middle East have prompted high-net-worth families and family offices to reassess concentration risk and rebalance capital.
"The period of geoeconomic stress has highlighted the importance of optionality. Investors who have best navigated this are the ones diversifying across regions," he said.
Dubai has long been a premier destination for high-net-worth individuals, drawn by its zero taxation, safety, connectivity and business-friendly environment. But regional tensions have clouded its safe haven status.
"Even if hostilities stopped right now, I don't think investor confidence would come back very soon," said Julia Roknifard, a senior lecturer at Taylor's University in Malaysia.
The disruption extends beyond financial flows to lifestyle and connectivity — two key factors that have long attracted wealthy expatriates. Given the uncertainty, Roknifard said investors will likely relocate alongside their assets, citing security concerns and the risk of travel disruptions.
Paul Bratby, Dubai-based founder and CEO of AI-powered trading signal platform xBratAI, said the data point to a more nuanced picture of wealth outflows from the Gulf.
"Where capital did move outward, it was portfolio diversification, not capital flight," Bratby said.
Gulf sovereign wealth funds deployed roughly $56 billion globally in the first nine months of last year, with about 40 percent directed toward Asia, he said.
Same message
Bratby launched xBratAI in Hong Kong in May and spoke with finance professionals across the region.
"What struck me wasn't a single conversation about leaving Dubai behind," he said. "Over and over, the message was the same: They wanted Asia access and a Gulf base, not one instead of the other."
Rather than walking out of Dubai, managers of family offices are using it as a launchpad for investments in Southeast Asia, he added.
Abbas Hashmi, principal of Saudi Family Holdings, a single-family office based in New York and Riyadh, said diversification has always been part of the wealth management strategies of high-net-worth individuals.
It is "highly unlikely" an ultrahigh-net-worth individual with $60 million in assets under management would concentrate investments in a single asset class, geography or product, he said.
"It's not about whether the money is moving out. It's about how well diversified their portfolio is," he said.
If it becomes impossible to keep assets in the Gulf, investors have traditionally shifted them to other safe havens, he added.
"Singapore has been leading in this space for a very long time, but I'm seeing Hong Kong coming out with a lot of incentives (for) family offices," Hashmi said.
Contact the writers at prime@chinadailyapac.com
