US hedge fund Verition joins global peers in setting up DIFC office

Connecticut-based firm, which manages $7.3 billion in assets, is seeking to capitalise on regional growth opportunities

The DIFC is home to a growing number of global hedge funds, investment banks and insurers. Photo: DIFC

Verition Fund Management, a US multi strategy investment adviser, is joining global peers in setting up an office in Dubai as it seeks to capitalise on growth opportunities in the UAE and the broader region.

The Greenwich, Connecticut-based hedge fund, which manages $7.3 billion in assets, is expanding its global footprint with an office in the Dubai International Financial Centre, it said on Thursday.

The company has received a licence from the Dubai Financial Services Authority to manage assets and conduct certain other financial services activities in the DIFC, one of the top financial centres in the Middle East, Africa and South Asia region.

Saad Mahmood, a former Morgan Stanley executive, has been appointed as senior executive officer of Verition's operations in the DIFC and will lead the company’s growth across the region.

“The establishment of Verition in Dubai confirms the firm’s strong commitment to the region,” the company said.

“The UAE and the wider Mena region are important markets for Verition, and the new presence will further enhance the firm’s ability to attract global investment talent, as well as capture important regional market opportunities.”

Dubai, a regional centre for tourism and trade, has emerged as a favoured destination for global investment companies, hedge funds and financial institutions due to its ease of doing business and friendly tax policies.

The emirate's economy expanded by 4.6 per cent on an annual basis in the first nine months of 2022, according to data from the emirate's statistics centre.

Emirates NBD estimates Dubai's full-year growth for 2022 at 5 per cent and expects its gross domestic product to expand by 3.5 per cent in 2023.

The DIFC grew at a record pace last year, with the number of active registered companies climbing by 20 per cent, while the financial centre's annual revenue exceeded Dh1 billion ($272 million) for the first time.

Salmaan Jaffery, chief business development officer of the DIFC Authority, says the number and scope of hedge funds established in financial centre is growing. Photo: DIFC

The number of active registered companies in the DIFC rose to 4,377, almost doubling from the 2019 pre-coronavirus level of 2,431.

New companies registered in the centre last year surpassed 1,000 for the first time since its inception.

The financial centre also has a pipeline of more than 50 hedge funds with assets under management in excess of $1 trillion that are waiting to be licensed.

Verition’s Dubai headquarters gives it access to DIFC’s financial and innovation ecosystem of more than 36,000 professionals.

The company’s presence in Dubai will also complement its operations in Greenwich, New York, London, Singapore and Hong Kong, it said.

“We are excited to continue our international expansion with the addition of a Dubai office,” said Josh Goldstein, Verition’s co-founder and president.

“The opportunity to live and work in Dubai is especially appealing to our current and prospective portfolio managers. The region offers a friendly time zone for traders with a global investment mandate, lower taxes and excellent infrastructure.”

With the number and scope of hedge funds established in the DIFC growing, the financial centre is developing its ecosystem around prime brokers and trading technology start-ups, said Salmaan Jaffery, chief business development officer at the DIFC Authority.

“DIFC’s remarkable growth, which, in part, is being fuelled by hedge funds like Verition, enables us to significantly contribute to Dubai’s ambition to be one of the world’s top three cities for business and drives [the] DIFC’s strategic position as a global hub for hedge funds.”