Dubai in talks to attract 50 hedge funds to Mideast Finance Hub

(Bloomberg) —

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The financial hub of Dubai is in talks with more than 50 hedge funds to establish itself in the Middle East’s business hub, after attracting industry heavyweights such as Millennium Management and ExodusPoint Capital Management.

“One area that has grown very quickly is the hedge fund sector,” Essa Kazim, governor of the Dubai International Financial Center, said at a briefing on Monday. “The backlog for this industry is large and growing and is actually one of the sources of our growth.”

Dubai is emerging as a preferred destination for financiers, drawn by its ease of doing business, tax-free status and its appeal as a global travel hub. It’s also a friendlier time zone for portfolio managers who have global investments from 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 gave up its London headquarters to set up shop in the emirate.

READ MORE: Dubai is new hedge fund hub as Millennium and ExodusPoint move in

The DIFC, as the business hub is known, offers reduced royalties and capital requirements for hedge funds that host a domestic fund. It also provides fertile ground for high net worth individuals and institutional investors for fund managers to take the plunge.

“We continue to not only authorize them, we continue to engage them globally,” said Salmaan Jaffery, DIFC’s chief business development officer. Hedge funds seeking a DIFC license jointly manage over $1 trillion in assets, Jaffery said, but declined to name the funds and how many currently operate at the center.

The DIFC said on Monday that revenue in 2022 hit a record 1.06 billion dirhams ($288.6 million) after a sharp rise in newly registered companies. Freezone results reflect Dubai’s economic resurgence after the Covid pandemic. The city-state has also attracted a number of newcomers, including Russian billionaires, real estate investors and crypto firms seeking a tax-friendly environment.