Connecting Capital to Global Impact

Good afternoon, ADFW. What a great afternoon, right? Everyone having a good time today? Come on, it's five o'clock. We got to get a little bit.

There we go. Thank you. Thank you. I want to thank his highness for his patronage and his excellency chairman Akhmed Josam al- Zabi for his guidance and leadership. I am deeply honored to speak at Abu Dhabi finance week.

Today we gather at a critical juncture where the scale of global challenges meets an unprecedented opportunity in capital markets. This will indeed be the biggest opportunity of our lifetimes to innovate, build and democratize the next generation of capital markets infrastructure. In doing so as conscious capitalists because after all that is the spirit of this great nation. The world is facing multi-trillion dollar challenges that require massive coordinated investment. These challenges include extreme weather.

The transition to a sustainable net zero economy demands immense capital for green technology, renewable energy projects, and climate resilience infrastructure. While amazing progress has been made, there is more capital required. Today it is estimated that over $4 trillion dollars is needed per year to hit our net zero goals in social inequality. As Mr. Gates highlighted earlier through the inspiring work that he is doing, bridging the wealth gap and ensuring equitable access to resources requires substantial continuous funding.

He argues that the time to put human welfare at the center of our climate strategy is now. And I agree. For example, over 800 million people still live in extreme poverty around the world. This is a fundamental ethical challenge. The cost to address social inequality is estimated at $70 billion per year according to the World Bank.

and nextgen infrastructure supporting the future of innovation, much of it happening right here in the UAE, specifically around artificial intelligence and quantum computing, necessitates the rapid global buildout of vast energyintensive infrastructure like data centers. This is the digital backbone of tomorrow and it comes with a formidable price tag. It is estimated that over $5 trillion is needed to fund the digital revolution of today by 2030. As we read every day, this is likely higher. These three areas alone, social inequality, climate, and infrastructure will collectively require trillions of dollars, again, trillions of new capital.

The issue, however, isn't a lack of capital per se. There's over 63 trillion dollars represented at ADFW alone. So, it's definitely not capital. But the issue is that it's a fragmented inefficient market ultimately that we need to be able to connect this market from capital market providers to capital uh next generation investment solutions in a democratized way. The magnitude of the need demands a transformational shift in how capital markets operate.

The first step of enabling this transformational shift is that the world needs a centralized, innovative and interconnected ecosystem. A single marketplace that efficiently links capital providers to the consumers of capital for these impactful projects. Solving the fragmentation issue we have today around the world. The second step of this shift is making available next generation investment solutions which can address these issues while also providing capital providers with attractive investment opportunities. Charity and negative greeniums are wonderful but to truly tap the trillions of dollars required to solve these challenges.

We need democratized investment solutions that provide a tangible, attractive and personalized return on investment. investment solutions that are at the intersection of Islamic and conventional finance so all can participate. This opportunity, this transformational shift, this ecosystem requires the participation of large pools of capital, but it also requires the participation of small ones. For perspective, total financial assets and private households, excluding personal real estate, has now topped 300 trillion dollars around the world. 300 trillion.

So, here's a thought. What if we the people were provided democratized investment solutions that not only met our retirement goals but also met our ethical values and we allocated save 5% to those solutions that would equate to over $15 trillion in new investment. Together we could solve these critical issues, free up government capital for redeployment, and ultimately deliver a multiplier effect the world has never seen before. The UN estimates that the creation of an ecosystem such as this that addresses these massive imperative projects connecting capital consumers with capital providers of all wallet sizes could create $61 trillion in economic value. 61 trillion.

While it's certainly an eye-catching number, it's important to put into perspective. Global GDP stands at roughly $115 trillion. But the global market cap of investable assets sits at roughly $250 trillion. This means that the interconnected ecosystem that I'm describing could add roughly 25% to that market cap if we all do our part and if we all execute. I assume by now you know where this discussion is heading.

This is Abu Dhabi and creating a centralized ecosystem with investment solutions that meet today's needs is precisely the bold vision of his excellency chairman Alzabi and that vision is called Majada meaning galaxy in Arabic it's going to change the financial universe specifically the Maja capital markets ecosystem is focused on centralizing innovating and interconnecting the world's structured product and fixed income markets to start a market that is already valued at over $3 trillion globally for structured products and over $145 trillion for global fixed income. This will truly be transformative. Utilizing structure products and fixed income in new transformational ways can go a long way in addressing these critical issues as they can be targeted, protective, and personalized financing solutions that investors need now more than ever given market uncertainty. These are also investment solutions that are ripe for disruption, democratization, and innovation within an ecosystem like Magata. By bringing efficiency, transparency, and innovation to capital markets, Maga is not just competing for a slice of the pie.

We're aiming to transform it. How? Well, fragmentation is the problem. Today, bond and structured product issuance is fragmented across the world leading to excessive cost, a lack of transparency, a lack of liquidity and inconsistency. It is estimated that these inefficiencies cost the world upwards of $2 trillion in loss productivity through slippage.

And as a result, centralization is the answer. Maja will be the first in the world to address these issues by centralizing and standardizing the entire capital markets value chain from issuance to purchasing to liquidity from Islamic finance to conventional under one framework within ADGM that is inter interconnected through technology to the world. By doing this, Magata can effectively funnel investor capital into targeted, impactful programs while providing access to the investment solutions we all deserve. To reiterate, a critical part of creating this ecosystem in the future is that we need the investment solutions of tomorrow. With ADGM, we have the opportunity to innovate on really impactful investment solutions such as Sharia compliant issuances with the first standardized and automated framework to serve the global Muslim population of of over two billion people and achieve the nation's goal of becoming the world's hub of Islamic finance.

Sharia issuance total $ 38 billion through the third quarter, up 30% year-over-year. But there is a massive opportunity for growth in this market by simply being inclusive to investors of all faiths and ethical issuance programs for social environmental benefits. The world has done a great job with green bonds but more innovation can be done and will be done with maga on this front. For example, structure products can reduce funding costs for debt issuers by over 30 30% creating a sizable dent in our mission to address these 21st century challenges. And lastly, tokenized issuances for increased liquidity and greater efficiency in the future.

Through our own studies, we have found that tokenization can reduce the cost of traditional debt issuance by over 50% while increasing the liquidity significantly. The investment future R has and will continue to move to the blockchain. The vision of Maga is to be the universal thread connecting capital to global impact. It is an ecosystem that connects issuers with investors, existing infrastructure with tomorrow's innovation, and Abu Dhabi to the world within capital markets, addressing the 21st century issues that will cost us all over $5 trillion. Under the leadership of Terminal Alzabi, this initiative, which unites Abu Dhabi's robust financial infrastructure, could have only been realized within ADGM, the de facto capital of capital.

As I said before, over $60 trillion dollars is represented in this room alone. Maja, a collaborative effort by Abu Dhabi's public and private sectors, is poised to accelerate the nation's ambitious 2031 goals. And these ongoing goals aim to establish Abu Dhabi as a global leader in Islamic finance, artificial intelligence, and the green energy transformation. The remarkable mobilization of Majada underscores Abu Dhabi's commitment to achieving the impossible. In closing, the era of fragmented, opaque, and inefficient capital markets must end.

With Magata, ADGM is pioneering the future, a transformative ecosystem where capital flows efficiently, transparently, and most importantly with purpose. Thank you and welcome to Maja.