Changing tack

In early 2012, the sailing dhows off the coast of Abu Dhabi will have some serious competition on their hands. The emirate is due to play host to the yachts of the round-the-world Volvo Ocean Race, in another sign of its growing profile and confidence on the world stage.

Although it has spent recent years in the shadow of its brasher neighbour, Abu Dhabi is emerging as a much safer bet for international business. Law firms have clearly picked up on the prevailing wind and have shifted their focus to the emirate, attracted by an ambitious domestic investment programme backed by the government and a group of sovereign wealth funds which, in a moribund M&A market, have become valuable global dealmakers.

And it’s not just Abu Dhabi that has supplanted Dubai as the focus of most firms’ strategies in the region. Construction may be on hold in Dubai, but the cranes are swinging into action in Saudi Arabia, the region’s true economic heavyweight. The $80bn King Abdullah Economic City on the Red Sea coast is slowly taking shape, complete with six-star hotels, an 18-hole golf course and gleaming glass buildings.

Such ambition might have made even Dubai’s top-of-the-market rulers blanch, but there’s a key difference. This project is backed not by a cash-strapped emirate, but by the oil wealth of the Saudi Arabian government, which is predicted to post a $24bn budget surplus this year. Following Dubai’s precipitous slump, international law firms have been keen to cash in: Freshfields Bruckhaus Deringer, Allen & Overy and Norton Rose have all picked up roles in the mega-project at various stages.

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