In light of global turmoil, Dubai’s current economic situation compares favourably to some of the world’s more established markets. While in the US and Europe the value of stocks nosedive and banks struggle for liquidity, investments in the Middle East have weathered the financial storm with relative vigour.

Underpinned by fixed-term assets and private equity, and bolstered by consistently high oil prices, Dubai’s economy has kept its head well above the water. Ironically, the preservation of assets in the region can be attributed to the same influential factor that critics have argued hinders growth; that factor is Shari’ah compliance.

For local investors in the Middle East, Shari’ah law is not only a guide for business; it is a set of moral principles that define an individual’s approach to living.

From a business perspective, these values, based on the teachings of the Qu’ran, prohibit the gaining of profit from a product or asset that is not directly owned by the individual. This, when one considers the short-selling and leveraging that goes on in many funds, has created an obstacle for many hedge fund managers looking to benefit from the growing economy within the GCC.

Nonetheless, the creation of the Dubai International Financial Centre (DIFC), a financial centre built on 110 acres of desert, has sought to graft investment opportunities by providing a tailor-made business environment with an integrated regulator, the Dubai Financial Services (DFSA).

It is the DFSA that opens this report. Ian Johnston, managing director of Policy and Legal Services, explains the regulatory processes and recent developments within the jurisdiction. Following this, Kevin Birkett, executive director of asset management at the DIFC, reveals the ethos driving the jurisdiction; explaining the importance of cultivating the potential of an undeveloped market with an ideal geographical location.

Next, Judith Caskey of Louvre Fund offers a detailed guide to the many social and financial considerations surrounding Shari’ah compliance. Matters of Shari’ah compliance are also touched on by Fawaz Elmalki of Conyers & Pearman as he gives an overview of the DIFC as a domicile for funds, comparing it to more established jurisdictions.

As investor opportunities open up in the region – as many private companies, family groups and multi-strategy firms look to list on a public exchange – Eric Swats of Rasmala highlights the increasing potential within the Initial Public Offering markets (IPO).

This is followed by a discerning summary by Anthony O’Sullivan, partner at Ernst & Young, of the findings of Ernst & Young’s recent annual survey exploring the changing nature of the global hedge fund industry. A transforming industry is also discussed by Phil Knowles of KPMG, who sees portfolio convergence and divergence as an attractive route for funds in the region.

Reza Ostad-Mohammadi of Active Services then outlines the technicalities of compliance and the regulatory framework underpinning the DIFC before, finally, Craig Roberts of Apex discusses the ample investor opportunities still in the region despite worldwide economic dismay.

Current upheaval across the globe coupled with the DIFC’s cushioned situation amid a relatively healthy economy has made the timing of this report ever more pertinent. We hope that the combined expertise within does justice to a jurisdiction that is perfectly placed to lead a changing industry into uncharted territory in the face of trepidation.

Adam Saville
Report editor

Download Dubai 2009, Hedge Fund Manager Special Report

PDF format, 3MB, 27Pages.

IN THIS ISSUE
6 Flexibility is key
The hedge fund industry requires flexibility to nourish, and Ian Johnston of the DFSA believes their agreed standards, consistent approach and regulation canoffer just that

7 Dubai: a fresh and exciting jurisdiction
Kevin Birkett tells HFMWeek how the DIFC is making the most of its geographical location and plans to offer its service to investors looking to access the financial markets of the Middle East

8 Ensuring compliance
Judith Caskey of Louvre Fund Advisors outlines the principles of Islamic investment funds, in particular Shari’ah-compliant funds, and what is involved in their administration

11 New beginnings
Fawaz Elmalki of Conyers Dill & Pearman compares Dubai to some of the more established jursdictions and paints a bright future for the hedge fund industry in the Middle East

14 All eyes on the Middle East
HFMWeek speaks to Eric Swats of Rasmala Investments about the interest Dubai is sparking from international hedge fund managers who are taking note of the emirate’s growing economy

16 Hedge funds: redefining the course
Anthony O’Sullivan of Ernst & Young discusses its annual global hedge fund industry survey and tells of how the results show that the hedge fund landscape appears to have changed forever

19 Changing times for the hedge fund industry
Phil Knowles of KPMG in the UAE believes that hedge funds can ride out the current rocky financial climate, but the industry will need to downsize to survive

22 A world-class centre
HFMWeek speaks to Reza Ostad-Mohammadi of Active Services about the importance of Shari’ah-compliant funds and the regulatory framework in the DIFC

25 Expanding market
Despite the current global economic turmoil, Craig Roberts of Apex Fund Services Middle East believes that Dubai is an attractive investment landscape for hedge fund managers

Visit HFM Week Website

HFM Week and hfmweek.com are produced exclusively for the international hedge fund community. Hedge Fund Manager was launched in September 2002, and is now published weekly. It is now read by over 5,500 alternative fund managers - predominantly CFO’s and managing partners - and their key advisors across the globe.

Cutting-edge features and news analysis cover all aspects of operating a successful hedge fund, including searches, prime brokerage, fund administration, risk management, front-to-back-end technology and legal and regulatory issues.

HFM Week and hfmweek.com are wholly owned by Pageant Media Limited, an independent publishing company that was formed in February 1998 and has grown to become a leading information provider within its core markets.

Comments (1)

Name

Email

Comment

smaller | bigger

Add Comment