Nicolas Parasie
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Dubai’s financial center 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. “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 favored 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 $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.
READ MORE: Dubai Is New Hedge Fund Hub as Millennium, ExodusPoint Move In
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 authorize 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 license jointly manage over $1 trillion worth of assets, Jaffery said, declining to name the funds and how many currently operate within the center.
The DIFC on Monday said revenue in 2022 reached a record of 1.06 billion dirhams ($288.6 million) after a sharp increase in newly-registered companies. The freezone’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.
