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."
The roughly 50 hedge funds looking to obtain a DIFC license jointly manage over $1 trillion worth of assets, according to Salmaan Jaffery, the hub's chief business development officer. The DIFC, as the business hub is known, continues "to not only authorise them, but we continue to engage them globally," he said.
Dubai is emerging as a favoured destination for hedge fund traders 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.
Izzy Englander's Millennium has grown its staff in the city to about 30 since securing a license 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 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.
Abu Dhabi 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 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 dirham after a sharp increase in newly-registered companies. The freezone's rise in activity mirrors Dubai's economic resurgence following the Covid pandemic. The city state has also attracted a range of newcomers including billionaires, property investors and crypto firms seeking a low-tax environment.