Institutions in the GCC currently report investing over $105 billion in hedge funds, not including investment by family offices, high net worth individuals and non-reporting allocators.
Despite large investment in the asset class, the region has struggled to attract funds with local asset management capabilities or domicile, this was one of the discussions debated when the Dubai International Financial Centre (DIFC) hosted the Alternative Investment Managers Association (AIMA) Hedge Fund Summit in its prestigious conference centre late last month.
A packed audience of executives from the investment management community attended the event, which was coordinated and sponsored by Dalma Capital Management Limited (a DIFC headquartered hedge fund manager).
The event included a list of distinguished speakers including Vladimir Maslyakov, Co-Founder of EXANTE, Mishal Kanoo, Deputy Chairman of the Kanoo Group, Howard Leedham MBE, CEO of Dalma Capital, Rajesh George, Head of hedge funds for the Global Investment House and Jack Inglis, CEO of AIMA.
In his presentation Vladimir Maslyakov outlined the present and future challenges in the prime brokerage space. Panelist speaker David Pulis noted that " The GCC is fast becoming the regional hub for hedge funds and drew comparisons with Malta’s fast developing European model in attracting alternative investments"
During the wide range of upbeat but highly informative presentations the audience received information that separated the myths from the reality of hedge fund investing with Mishal Kanoo emphasizing that hedge funds invariably represent a viable insurance policy in any diversified investment strategy.
Howard Leedham compared the headlines against the trend-lines as they related to hedge funds and demonstrated their performance through good times and bad by the achievement of robust risk management strategies. He also dispelled some common perceptions of hedge fund by emphasizing that risk management is a vital component of any hedge fund and risk adjusted returns, rather than outright return must always be an investor consideration.
Rajesh George stressed the importance of risk evaluation in any portfolio and hedge fund investment. Additional highlights of the summit where the announcement that Dalma Capital has agreed to donate 15% of its fees to the Emirates Foundation whenever a UAE based investor invests in its fund. This is the first ever hedge fund initiative of its kind in the UAE and the CEO of the Emirates Foundation was in attendance to support the announcement.
The summit concluded with a wide-ranging panel discussion moderated by Zachary Cefaratti, a Risk Officer at Dalma Capital. The panel discussion included industry experts from Exante, HSBC Private Bank, Simmons and Simmons, the DIFC Authority and AIMA who discussed the expansion of the DIFC funds regime, hedge fund investment for varying investor profiles and omnibus platforms.