Dubai hedge fund managers are unfazed by the war: "The UAE could come out very strongly from this"

Is this the end of Dubai as a haven for portfolio managers fleeing high taxes in Europe? If you read the many memes to this effect on social media and watch the footage of the drone attack at Dubai airport, you might think it is. But Dubai residents have influencers of their own, and every single portfolio manager we spoke to said - off the record- that they plan to stay. It's not just because they have no choice. 

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"People accept that this is unprecedented," said one portfolio manager at a major Dubai fund, adding, "We are all relaxed." Another portfolio manager said it's "inappropriate and absurd" to suggest that anyone might be having second thoughts about Dubai in light of Iran's attacks on targets in the UAE, almost all of which were deflected by missile interceptors. Another senior portfolio manager living on the Palm Jumeirah, where four people were injured last night, said nothing has changed: "There's no difference whatsoever." A family office employee said he was out watching the football in an outdoor bar: "It's 27 degrees. Yesterday was a little unnerving, but it's all good." 

While the rest of the world speculates about expats' desertion of the UAE, UAE residents are watching the Instagram accounts of people like Joules Sullivan, a Dubai-based tailor, who insists the risks are overdone. "Civilians are not being targeted. This is theatre, the risk of falling debris is less than the risk of falling over yourself in the shower," says Sullivan. Western media are exaggerating the situation to "dunk on Dubai," he claims. "The reality is that my family are much safer here in the UAE than they would be in many Western cities," he adds, noting the low crime rate in the Emirates relative to the West. 

Sullivan's comments will be popular with Dubai authorities, which have reportedly been threatening to take legal action against anyone circulating "outdated videos" of previous fires on the Palm Jumeirah. 

And yet, not everyone in Dubai is completely sanguine. Bloomberg says there's been panic buying in some stores. One fund manager says families have been sheltering in the underground car park in his building. JPMorgan and Citi have been telling staff in Dubai to shelter in place, and executives at hedge fund Dymon Asia have been discussing what will happen at their Dubai office if the war continues. The British government is reportedly drawing up plans for the mass evacuation of British nationals from the UAE “by air, land or sea.”  

Much depends on the length of the war. "If it's just a few days of sheltering and there are minimal casualties then the UAE could come out of this very strongly within one or two years," says one portfolio manager. Another agrees: "The UAE is not at war, he says. "This is Iran versus the US and Israel and all the stuff coming down in Dubai is just intercepted Iranian rockets heading for Israel. Will Iran attack the UAE? If they do, they are closer to the end as regional leadership will coordinate to completely wipe them out. At least, that's my point of view."

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