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Dubai wants to become a global hedge fund hub as star portfolio managers continue to flock to the emirate.
The Dubai International Financial Centre’s chief business development officer Salmaan Jaffery said that the hedge funds are coming to the city from New York, London, and Hong Kong.
“Roughly 45 hedge funds are in the regulatory approval process,” Jaffery told Financial News.
“The decision to domicile overseas in the current hedge fund wave is driven by portfolio managers,” he added.
Dubai is home to some of the world’s biggest hedge funds including Millennium, Balyasny, Sculptor, ExodusPoint, Hudson Bay, and King Street.
Sidharth Chaturvedi, one of Millennium’s senior portfolio managers, is based in Dubai. Mudit Mehta, a former portfolio manager at Caxton Associates in London, joined Millennium in Dubai as a senior portfolio manager in June.
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In June, Hudson Bay hired Schonfeld’s Chiara Chabanne as a portfolio manager in the emirate, while in July Balyasny hired Freepoint Commodities energy trader Jeremy Tricon as a portfolio manager.
Jaffery said that the pandemic played a major role in the recent inflow of hedge fund managers.
“During Covid, Dubai closed very quickly and opened very quickly. While most of the international markets like New York, London, San Francisco, and Hong Kong were closed at the time, we saw an inflow of professionals in Dubai, including hedge fund managers, who later decided to stay here,” Jaffery told FN.
“So, what’s happening is that Covid changed the conceptual relationship between what you are doing and where you are doing [it]. Once the mental model for hedge fund people broke down that you don’t need to be in big cities like New York and London, they felt that they could be anywhere in the world.”
In Dubai, lower taxes have played a major role in attracting hedge fund talent from different parts of the world, meaning portfolio managers can potentially take home more than in New York in London.
“An important aspect is lifestyle. I used to live in New York and love it but places like New York have lost a little bit of their lustre in terms of infrastructure, taxation, quality of life, and other social norms. Same with the case of London: [there is a] high cost of living and taxation,” Jaffery said.
“However, London and New York still remain pretty significant centres for hedge funds.”
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Opportunities in capital raising, sales management, scalability, and talent are some of the key reasons behind the latest inflow of hedge funds, according to Jaffery.
The Dubai International Financial Centre currently has over 330 wealth and asset management firms including more than 40 hedge funds from the US, Europe, GCC, and the UK.
Jaffery said that the UAE’s golden visa also played an important role in attracting asset managers and hedge funds, part of Dubai’s strategy to keep people in the city for longer.
To contact the author of this story with feedback or news, email Bilal Jafar
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