Dubai in talks to attract 50 hedge funds to Mideast finance hub

DUBAI’S financial centre is in talks with more than 50 hedge funds about setting up in the Middle East business hub after attracting industry heavyweights such as Millennium Management and ExodusPoint Capital Management.

“One space that has been growing very fast is the hedge fund sector,” Essa Kazim, governor of the Dubai International Financial Centre, said at a briefing on Monday (Feb 20). “The backlog for that industry is big, and it’s growing, and it’s one of the sources of our growth, actually.”

Dubai is emerging as a favoured destination for financiers who are drawn by its ease of doing business, tax-free status and its allure as a global travel hub. It is also a more friendly time zone for portfolio managers who have global investments spanning North America to Asia. LMR Partners, a US$9.8 billion hedge fund, is opening in the city, Bloomberg reported in November, and All Blue Capital ditched its London headquarters to base itself in the emirate. 

The DIFC, as the business hub is known, is offering reduced licensing fees and capital requirements for hedge funds domiciling a domestic fund. It also offers a fertile ground of high net worth individuals and institutional investors for fund managers making the move.

“We continue to not only authorise them, but we continue to engage them globally,” said Salmaan Jaffery, the DIFC’s chief business development officer. Hedge funds looking to obtain a DIFC licence jointly manage over US$1 trillion worth of assets, Jaffery said, declining to name the funds and how many currently operate within the centre.

The DIFC on Monday said revenue in 2022 reached a record of US$288.6 million after a sharp increase in newly-registered companies. The free zone’s results mirror Dubai’s economic resurgence following the Covid pandemic. The city state has also attracted a range of newcomers, including Russian billionaires, property investors and crypto firms seeking a low-tax environment.  BLOOMBERG