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Mon 7 Feb 2011 05:41 PM

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Abu Dhabi's Royal Capital plans fixed income, hedge funds

Firm sees investor appetite for fixed funds growing, plans to launch hedge fund

Abu Dhabi's Royal Capital plans fixed income, hedge funds
Royal Capital has already launched two small funds totaling AED50m

Royal Capital, an Abu Dhabi-based investment firm, plans to
focus on fixed income funds as it taps growing investor demand for the Middle
East and North Africa (MENA), its head of asset management said.

The two-year-old firm, capitalized at AED300m ($81.7m), has
already launched two small funds totaling AED50m.

"We will develop the funds business because it is
business of scale. Investor appetite is increasing for certain funds like fixed
income," Ahmed Talhaoui said.

While equity markets have been muted in the region, fixed
income markets are performing well, Talhaoui said, adding there are not many
offerings for fixed income in the region.

Royal Capital launched the AED25m ‘MENA Fixed Income Plus
Fund’ last March which has more than doubled in size.

A second fund, the ‘MENA Multimarket Strategy Fund’,
launched in January is also seen doubling to AED50m by March due to strong
investor commitment, he said.

"Our third will be a hedge fund. It is a question of
timing, possibly this year," he said. Details of the size are yet to be
finalized.

Royal Capital, owned by United Gulf Bank of Bahrain, is also
working on an initial public offering for a real estate firm in the Gulf that
could come to the market before end of 2011, said Imad Abukhlal, Royal
Capital's executive director, declining to elaborate.

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