DIFC teams up with alternative investment group AIMA as it attracts more hedge funds

Companies that have expanded to the centre in Q2 include Hudson Bay Capital, Asia Research and Capital Management, King Street Capital, Balyasny Asset Management and Verition Fund Management

The DIFC grew at a record pace last year, with the number of active registered companies climbing by 20 per cent annually. Chris Whiteoak / The National
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The Dubai International Financial Centre has signed a preliminary agreement with the Alternative Investment Management Association and welcomed five additional global hedge funds as it seeks to bolster its status as an international hub for alternative investments.

AIMA represents more than 2,100 corporate members with $2.5 trillion in hedge fund and/or private credit assets.

The five global hedge funds established their regional presence in the centre during the second quarter of this year, DIFC said in a statement on Tuesday.

They include Hudson Bay Capital, a multibillion-dollar hedge fund operating in Greenwich, New York, Miami and London; Asia Research and Capital Management, a Hong Kong-based privately owned asset management firm; and King Street Capital, an alternative asset manager with more than $23 billion across an institutional platform.

Balyasny Asset Management, which has more than 1,000 investment professionals, and Verition Fund Management, which manages $7.3 billion in assets globally, also set up in the DIFC in the April to June period.

The firms will relocate senior employees to DIFC to conduct portfolio management and investor relations activities, it said.

Meanwhile, new private equity firms that set up offices in the centre include TPG Global, Rockpoint and CVC Capital Partners.

“DIFC is delighted to be the first financial centre in the region to partner with AIMA,” said Arif Amiri, chief executive of DIFC Authority.

“Innovation and cross-border collaboration attracts capital flows and opportunities in growth markets for high-performing hedge funds with a range of investment strategies.”

DIFC is “driving the future of finance by providing a robust and hyper-connected ecosystem for the alternative investment industry that enables them to manage their global portfolios efficiently”, Mr Amiri added.

The emirate has emerged as a favoured destination for global investment companies, hedge funds and financial institutions due to the ease of doing business and friendly tax policies.

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.

The number of active registered companies in the DIFC rose to 4,377, while new companies registered in the centre last year surpassed 1,000 for the first time since its inception.

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More than 50 hedge funds with assets under management in excess of $1 trillion are waiting to be licensed, DIFC governor Essa Kazim said in February.

DIFC is continuing discussions with other global hedge funds that are looking to establish offices within the centre, where they benefit from support services including prime brokers, law firms, consultancies and tax specialists, it said in the statement on Tuesday.

The centre is also aiming to set up an ecosystem that will include hedge funds with a range of investment strategies, additional prime brokers and technology start-ups, it said.

“This augmentation of the ecosystem creates a flywheel for traders, portfolio managers and support teams, further strengthening Dubai as a global hub for hedge funds,” the statement said.

DIFC's preliminary agreement with AIMA will back the association's members in Dubai and support the maturation of the alternative asset management sector, said Jack Inglis, chief executive of AIMA.

“The past year has seen many reports of alternative investment managers, including some of the industry’s largest names, opening offices in the United Arab Emirates,” he said.

“AIMA has enjoyed member representation in the region for over 15 years and has closely watched its growth as an important global financial hub, not just for alternative investments but also the wider asset management industry.”

Updated: July 11, 2023, 2:39 PM