Dubai’s growing hedge fund sector is a significant driver of the UAE’s economic expansion, according to Bas Kooijman, CEO and Asset Manager of DHF Capital.
In 2023, the Dubai International Financial Centre (DIFC) authorised ten new hedge funds, contributing to a one hundred and twenty-five per cent year-on-year increase in hedge fund managers establishing operations in the region from the previous year.
According to Kooijman, this growth serves as a catalyst for the recently announced DIFC Funds Centre.
Hedge funds in Dubai
Dubai is home to more than 72,000 millionaires and the city’s wealth landscape is expanding rapidly.
The number of high-net-worth individuals (HNWIs) in the UAE is projected to grow by forty per cent by 2031, boosting investment activity and reinforcing Dubai’s appeal as a financial hub.
The UAE’s growing reputation as a hedge fund haven continues to attract global investors, with the DIFC Funds Centre created to meet this demand and support ongoing growth in line with national initiatives such as the Dubai Economic Agenda (D33).
Kooijman said: “Hedge funds bring substantial international capital into the region, enhancing sectors like real estate, technology, and infrastructure.
“Their investments not only support economic diversification but also contribute to job creation in high-value industries.
“Moreover, hedge funds boost market efficiency through their sophisticated strategies, fostering a resilient financial system that aligns with Dubai’s ambition to become a leading global business and innovation centre under D33.”
Hedge funds are playing a crucial role in diversifying the UAE’s economy, particularly through innovation and emerging sectors.
Currently, the Middle East holds the highest proportion of sovereign wealth invested in hedge funds globally. While the region accounts for less than 1 per cent of global hedge fund assets under management (AUM), the market is expanding rapidly, with thirteen of the world’s top 100 hedge funds now having offices in DIFC.
Nearly 40 hedge funds established in the region manage at least $1bn in assets.
Kooijman said: “In less than two decades, Dubai and DIFC have become the leading investment hub and financial centre for the Middle East, Africa, and South Asia (MEASA).
“The growing concentration of hedge fund activity will only further strengthen the UAE’s financial ecosystem. DIFC hosts 300 wealth and asset management firms and is the largest market in the region.
“Furthermore, 50 companies conducting hedge fund activities are registered at DIFC, and close to 40 manage at least $1bn in AUM”.
The growing presence of hedge funds in the country has the UAE on track to continue attracting wealth, talent, and financial innovation, particularly in Dubai.
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