Dubai: The Dubai-based Dalma Capital Group, an investment consultancy, is to acquire The Global CIO Office, a firm that specialises in ‘outsourced’ chief investment officer services to family offices and the like.
Following the deal, the Dalma Global CIO Office will operate as a separate arm of Dalma Capital and will initially service clients with a minimum investment funding of $50 million.
The acquisition of The Global CIO Office helps Dalma Capital ‘create a full-service integrated platform for funds, investment banking and wealth advisory. It also comes when ‘family offices’ needs for handling the challenging macro- economic landscape is greater than ever’.
This is also the space that global fund managers are aspiring to reach out to, with a slew of boutique consultancies having opened a base in the UAE in recent months.
Look beyond 60:40 investment model
Gary Dugan, founder and CEO of The Global CIO Office will be joining the Dalma Capital Group as Chief Investment Officer, and will be responsible for managing the Dalma Global CIO Office. He will be based in Dubai.
“Families and institutions are navigating an increasingly complex investment landscape, with a challenging macro-economic backdrop starkly different to what we have seen in the past 40 years,” said Dugan. “Falling rates are now replaced by rising rates, too little inflation is now replaced by too much inflation, the ’60:40’ has failed investors and the allocation to alternative investments has taken the spotlight.
Investment strategies and asset allocations need to prepare investors strategically and tactically for this market. But many families and institutions do not have an in-house Chief Investment Officer who is equipped with the understanding of macroeconomics, alternative investments and strategic asset allocation that is needed to manage a large portfolio successfully.
“Investment strategies and asset allocations need to prepare investors strategically and tactically for this market. But many families and institutions do not have an in-house Chief Investment Officer who is equipped with the understanding of macroeconomics, alternative investments and strategic asset allocation that is needed to manage a large portfolio successfully.
“The outsourced CIO solution is targeted to address families and institutions who want the benefit of having a world-class Chief Investment Officer in house, but also benefit from synergies with an external platform - Dalma Capital - which has advanced capabilities in investment banking, alternative investments, asset management and also has access to world class global investment talent.”
All formalities related to the Dalma Capital buy are done and in the ‘final stages of integration'.
“We plan to hire additional asset managers in the immediate term,” said Dugan. “Eventually, we would like to have a team of 3-5 CIOs supported by 15-20 asset managers. With all other support functions being provided by growing the institutional infrastructure of Dalma Capital which already supports capabilities across asset classes from hedge funds to private equity, from equities to fixed income and from crypto to venture capital.”
Expand the offer
Plans for the future include adding ‘internal skillsets’ in fiduciary and trust services, tax planning and other multi-family office capabilities. “However, our preference immediately is to focus on providing the extremely high-value services of outsourced CIO capabilities to our clients while outsourcing other multi-family office services to our network of external providers,” said Dugan. This can be ‘managed by us or by our clients’ existing teams'.
“Many of these services are highly commoditized, but benefit from the economies of scale and centralized management of these services we can provide as a platform.”
DIFC-based Dalma Capital Group, formed in 2011, includes Dalma Capital Management Ltd., the alt-investment management platform and advisor. This has now been expanded with the outsourced CIO solutions for clients.
Combining Dalma’s institutional platform with The Global CIO Office’s market leading advisory services is a 1+1=11 opportunity for clients. Many families in EMEA and Asia-Pacific need Chief Investment Officer capabilities and are overly dependent on private banks.
Dugan launched The Global CIO Office in the UAE in 2017. His previous positions had been as managing director at JPMorgan and CIO at Emirates NBD and of the National Bank of Abu Dhabi. He was also the Managing Director and CIO for Asia and Middle East at Coutts, and the Managing Director and CIO of Merryll Lynch Wealth Management EMEA.
Leading families with large portfolios and complex businesses need the best strategic advice for their investments, but a full time, in-house Chief Investment Officer is often impractical. The Dalma Global CIO Office will provide ultra-high-net-worth families with a level of sophisticated in-house investment capability that is otherwise only available to the largest, most complex family offices.