Dubai Is the Newest Hedge Fund Hotspot

Hedge Funds

More and more financiers are choosing to expand in the emirate

Staff Writer

Published: 01/07/2022

3 min read

  • How many hedge funds firms are active in the centre in comparison to 10 years ago? Any numbers would be helpful for him.

Our wealth and asset management business has grown significantly over the last 10 years. In 2012 it hovered around $10BB. DIFC-based funds grew their assets under management by ~40% between 2018 and 2022, outperforming market growth.

Today is stands at nearly $450 of AUM. A significant reason for this growth is the increasing number and sophistication of our global asset managers, particularly in the hedge fund space. By year end, appx 15% of our wealth and asset management business will comprise hedge funds, ranging from hedge fund specialists to firms that market hedge funds, to hedge fund product manufacturers to platforms that use that product.

  • Could you provide any insights on why hedge funds are coming to Dubai and Abu Dhabi?

In our recent US roadshow, we engaged with some of the largest hedge funds in the world, including current DIFC client, Millennium Capital, who now have over 30 people and continue to grow. They expressed an interest and/or commitment to establish a Dubai presence. This recent trend is being driven by portfolio managers, who appreciated the attractiveness of Dubai while stuck in their respective cities during COVID lockdowns. The pandemic broke the conceptual relationship between “what” you do and “where” you do it. Once this occurred, cities like Dubai became exceptionally competitive globally. Firms realized Dubai was highly vaccinated and open for business. It was safe for their families. It is modern and cosmopolitan. HFs noted that the DIFC legal and regulatory platforms are world class and comparable with any top financial centre. So they are moving here, many with families. Earlier, firms would establish a small presence to manage fund raising relationships. Now, portfolio managers want to build and manage their business from DIFC. They can attract and recruit top talent to DIFC because of the career opportunities as well as the Dubai lifestyle. As an added benefit, staff from around the world (except the US) enjoy an immediate 40 to 50% uplift in compensation due to the DIFC’s tax free regime. Dubai and DIFC also offers exceptional new investment opportunities for hedge fund managers also due to our progressive regulations on digital assets and crypto, which are not yet regulated in other global markets.