Financial Hub DIFC Witnesses Surge in Global Hedge Fund Migration

Dubai’s International Financial Centre (DIFC) has emerged as a magnet for globally renowned hedge funds, marking a significant surge in the migration of top-tier financial entities to the Middle East, Africa, and South Asia (MEASA) region.

Over the last three months, the Dubai Financial Services Authority (DFSA) authorized a wave of prestigious hedge funds to set up operations within DIFC. Among the notable entrants are Asia Research Capital Management, Brevan Howard, Carrhae Capital, Cresen Capital, Lighthouse Partners, Merlyn Advisors, Noventa Capital Management, and Qube Research Technologies. Blue Owl Capital and Walleye Capital have also completed their registrations in this period.

This mass influx of hedge funds underscores Dubai’s position as the premier financial center in the region, capable of attracting top-tier talent and offering access to substantial pools of public and private capital. Notably, Dubai boasts the highest concentration of wealth in the Middle East, with over 68,400 individuals possessing investable wealth exceeding US$1 million—three times more than any other city in the region. Additionally, the emirate manages a staggering $4.7 trillion of capital from Middle Eastern State-Owned investors, solidifying its status as a neutral ground for investment management.

The expansion of the hedge fund sector in DIFC extends beyond the establishment of globally recognized entities; it also fosters diversity in business models, accommodating firms of varying sizes and technology platforms. This growth trajectory further enhances local prime brokerage and trading capabilities.

Salmaan Jaffery, Chief Business Development Officer at DIFC Authority, expressed enthusiasm about the continued growth, emphasizing DIFC‘s role as a burgeoning global hub for hedge funds and the region’s primary market for such entities. Jaffery highlighted the strategy of attracting top global talent and leveraging Dubai’s access to substantial capital as key factors in this growth.

This recent surge follows DIFC‘s previous success in attracting prominent hedge funds like Hudson Bay Capital, King Street, Balyasny Asset Management, and Verition Fund Management LLC earlier in the year. Notably, in 2022, DIFC witnessed a remarkable 54% increase in the total number of hedge funds operating within the Centre. A significant portion of DIFC-based hedge funds originates from the US and UK, including two of the world’s top ten largest hedge funds.

Moreover, DIFC‘s collaboration with AIMA, the alternative investment industry’s leading global voice, further solidifies its position as a key player in the financial landscape. This agreement emphasizes DIFC‘s commitment to fostering a robust ecosystem for alternative investment management, representing over 2,100 corporate members with assets totaling over $2.5 trillion in hedge funds and/or private credit assets.

The accelerating migration of globally renowned hedge funds to DIFC cements Dubai’s stature as a thriving financial hub, poised to shape the future of the financial industry in the MEASA region and beyond.