Hedge Funds

Dubai city is expecting to become a new hub for hedge funds

  • Dubai’s  financial hub is in talks with 50+ hedge funds.
  • The United Arab Emirates wants the globe to know it is open for business.
  • The DIFC reported on February 20, that income is set to reach a record $288.6 million. 

Dubai’s  financial hub is in talks with more than 50 hedge funds to set up a Middle East business hub after engaging  industry giants such as ExodusCapital Management and Millennium Management. 

Dubai is coming out as a preferred destination for hedge fund traders, who are attracted by its ease of doing business, tax-free status and its attraction as a global travel hub. This is also a more favorable time zone for portfolio managers who have international investments that reach from North America to Asia.

As reported, according to the Hub’s Chief Business Development Officer, Salman Jaffery, nearly 50 hedge funds seeking DIFC (Dubai International Financial Centre) licenses have combined assets under management of over $1 trillion.

DIFC, as the business hub is known, “not only continues to authorize them, but we continue to engage them globally,” Mr. Jaffery added, diminishing to name the funds and the centre’s how many are currently working within.

On the Fence 

Like a pair of its neighbors Qatar and Saudi Arabia, the United Arab Emirates wants the global to know it is open for business – with creature comforts few other countries in the world can match. To lure U.S. hedge funds, the DIFC is lowering the fees required to get a license to operate there, as well as lowering capital conditions for domestic funds.

And that’s in addition to the crystal clear receiver: tax-free status, a favorable time zone for businesses laying across both North America and Asia, as well as close to $1.2 trillion of ready-to-tap sovereign wealth funds in Abu Dhabi.

As every country in the UAE wants it to be open for business, they really understand what that means. Where many countries of the world are together suppressing the upper layer of Russia, the Gulf countries have been welcoming.

According to a news source, tens of thousands of Russians have transferred to the United Arab Emirates over the past year to evade several sanctions and restrictions forced by Europe and its allies. Reportedly, in February 2023, Russia’s MTS Bank became the first foreign bank to receive a UAE operating license.

Additionally, Izzy Englander, the Chief Operating Officer of  Millennium  Management, has increased its workforce in the city to around 30 since securing the license in 2020. ExodusPoint Capital, one of the world’s largest multi-strategy hedge funds, registered with the DIFC in June last year. 

The Governor of Dubai’s DIFC, Essa Kazim Said that, “One space that has been growing very fast is the hedge fund sector. The backlog for that industry is big and it’s growing and it’s one of the sources of our growth actually.” 

Meanwhile,  the DIFC reported on February 20, that income is set to reach a record 1.06 billion dirhams ($288.6 million) last year following a sharp increase in newly-registered companies. The increase in freezone activity reflects Dubai’s economic improvement following the COVID pandemic. The city-state has attracted many newcomers including Russian billionaires, property investors and crypto firms looking for a low tax environment.