The wealth and investment landscape has seen its fair share of changes over the last few years and new technologies have emerged as a powerful factor, the most significant being digital assets. As the ecosystem matures, it presents its share of opportunities and concerns.
The Wealth Today Summit held on June 21, 2022, at the Address Dubai Mall Hotel, delved into emerging trends and factors that affect the investment ecosystem, especially in the UAE. The Wealth Today Summit is an industry-driven event attended by over 300 senior executives from the wealth and investment industry.
The digital assets adoption, the way forward in institutional capital were some of the topics discussed at The Wealth Today Summit. The experts who spoke at the forum were a mix of industry leaders and regulatory authorities, including Wai-Lum Kwok, CFA, Senior Executive Director, Authorisation & Fintech, FSRA, ADGM; Benjamin Ampen, Managing Director MENA, Kraken Crypto Exchange; Dr. Ryan Lemand, Co-Founder & CEO, Neovision Wealth Management, James Munce, CEO, Abu Dhabi Catalyst Partners, Bhaskar Dasgupta, Independent Board Director and Advisor and Gaurav Dubey, CEO, TDeFi – Crypto Incubator and Advisory, among others. The topics discussed covered various aspects of the digital asset spectrum such as DeFi for family offices, tokenization of funds and virtual assets, investing alternative investments and hedge funds, family offices navigating the Venture Capital space and investing in offshore jurisdictions: themes and considerations.
“The number and caliber of people who attended The Wealth Today Summit reflects the current state of the market. At the event, we reflected upon why the traditional world should start considering digital assets as a part of their asset portfolio,” states Gaurav Dubey, CEO, TDeFi – Crypto Incubator and Advisory. He adds, “The last three years have been pivotal in mass adoption and acceptance of crypto as an asset class in the average household. Factors such as tokenization of regulated securities like gold, carbon credits and even trees played a huge role in making this happen. Today, crypto has found its peg in the traditional finance market. We see that the crypto market is performing better than traditional assets currently. As a high-risk asset, crypto cannot form a majority of the asset portfolio but it has found its place in the wealth preservation funds.”
Digital Assets are finding their way into family office portfolios, and they become part of the diversification play. Dr. Ryan Lemand, Co-Founder & CEO, Neovision Wealth Management, comments, “Family offices, particularly in this region invested heavily in equities and real estate. Real estate takes a big portion of an investment portfolio. However, it is tedious to register or exchange your property in the traditional manner. Besides, with the peak we observe in both these segments, it makes sense for family offices to consider alternative investments in the coming periods. At the sessions, we introduced DeFi to more traditional investors rather than specialized investors. With DeFi, a smart contract adds convenience and makes it accessible to investors.”
Benjamin Ampen, Managing Director MENA, Kraken Crypto Exchange, adds, “DeFi is in a very interesting space, and still in its infancy. It can address issues like inefficiency, opacity, lack of interoperability and centralized control. It comes with an attractive promise of removing intermediaries.”
Going forward, regulations will play a key part. ADGM’s Financial Services Regulatory Authority (FSRA) is at the forefront of issuing regulatory frameworks around DeFi. Wai-Lum Kwok, CFA, Senior Executive Director, Authorisation & Fintech, FSRA, ADGM reveals, “We released a whitepaper with reference points to encourage dialogue with the community. It is based on four concepts; DeFi does not change the nature of financial services; Equivalent risk, equivalent rules; No anonymous participants; and governance of defi protocols.”
The Summit also delved into the nuances of investing in offshore jurisdictions, tax implications and associated risks in addition to having a high-level conversation on the state and future of investments in Alternative Investments and Hedge Funds.