Dubai in talks to draw 50 hedge funds to Mid-East finance hub
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Dubai is emerging as a favoured destination for hedge fund traders who are drawn by its ease of doing business and tax-free status.
PHOTO: REUTERS
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Dubai – 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,” Mr Essa Kazim, governor of the Dubai International Financial Centre (DIFC), said at a briefing on Monday. “The backlog for that industry is big and it is growing, and it is one of the sources of our growth, actually.”
The roughly 50 hedge funds looking to obtain a DIFC licence jointly manage more than US$1 trillion (S$1.34 trillion) worth of assets, according to Mr Salmaan Jaffery, the hub’s chief business development officer. The DIFC, as the business hub is known, continues to not only authorise them but also “engage them globally”, he said, declining to name the funds and how many currently operate within the centre.
Dubai is emerging as a favoured destination for hedge fund traders who are drawn by its ease of doing business, tax-free status and 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.
American investor Israel Englander’s Millennium has grown its headcount in the city to about 30 since securing a licence in 2020. ExodusPoint Capital, one of the largest multi-strategy hedge funds in the world, registered in the DIFC in June.
The financial centre is offering reduced licencing 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.
Less than a two-hour drive away, Abu Dhabi, whose sovereign wealth funds oversee more than US$1.2 trillion, is also making a push to attract more foreign money and financial firms. Brevan Howard Asset Management, best known for macro trading and a recent push into digital assets, is opening an outpost in the United Arab Emirates’ capital and plans to have about 100 people in the region.
Separately, the DIFC on Monday said revenue in 2022 reached a record of 1.06 billion dirhams (S$385.3 million) after a sharp increase in newly registered companies. The free zone’s rise in activity mirrors Dubai’s economic resurgence following the Covid-19 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
