UAE and Qatar Hedge Fund Boom

According to research conducted by banking group Mirabaud, the Middle East is set to become increasingly active in the global hedge fund industry. The report also said that the UAE and Qatar could potentially be playing dominant roles in the region.

Mirabaud forecasts that hedge funds will become increasingly attractive to the region’s ever-more sophisticated regional investors, especially given the high levels of excess liquidity in the Middle East.

CEO Gilles Rollet said, "Globally, hedge fund centres have emerged from the most sophisticated financial centres, such as New York, London, Hong Kong and Singapore. The relevant defining attribute of each of these locations is the maturity of their capital markets….The Dubai International Financial Centre has even taken the step, through its regulating body the Dubai Financial Services Authority, to create a Hedge Fund Code of Practice, giving legal weight to the effort to make Dubai a centre in the hedge fund industry."

Increased institutional investment in the regional capital markets, especially the UAE, is another sign of the maturity of markets here, Mirabaud’s research found. Globally, at a time when most traditional investments are generating low levels of returns, institutional investors are increasingly attracted to alternative asset classes such as hedge funds.

"A hedge fund-friendly environment can be seen to emerge from a region with high levels of excess liquidity and strong degrees of professionalism among regulators and service providers. The Middle East is well known for its access to enormous amounts of excess liquidity due to the high price of oil. In the UAE and Qatar, we are now seeing professionalism from both regulators and service providers grow steadily. Both countries have governments that are committed to forging legal structures that allow for increasing financial sophistication in their respective financial districts. If current trends continue, these two countries will undoubtedly emerge as hedge fund centres, and given enough time, will stand on par with Singapore, Hong Kong and even London and New York." Rollet added.

Mirabaud & Cie, was founded in Geneva in 1819. Originally a bank operating solely in Switzerland, Mirabaud has since developed its brand on three continents. The bank, which has nearly $22 billion in assets under management, has offices in Geneva, Zurich, Basel, Paris, Monaco, London, Montreal, Nassau, Hong Kong and now Dubai.