The Middle East countries had lesser importance in the world’s geography half a century ago. Tourism, high-rise buildings, billionaire families, or royalties were all insane thoughts.
The rise of oil prices globally was the primary reason behind the turnaround story of Gulf countries. With the discovery of oil and its further utilization has had a considerable effect on economic development. Royalties from oil exploration concessions and oil selling brought huge foreign reserves for countries within the Gulf, including Saudi Arabia, UAE, Qatar, Kuwait, and Bahrain.
The transformation of the Middle East:
The foreign reserves turned countries rich. The rich spent money for better returns. Industries were set up. High-rises were deployed. The Hoteling industry was introduced. Beaches were opened for international travellers. Tourism began. Economies improved further. And, the Middle East transformed into what it is today: essential to the world’s economy and geopolitical cycle.
The financial development in the MENA region:
Over the past three decades, the Middle East and North Africa region (MENA) has transformed into financial hubs. For example, the world trade centres, business hubs, and IT & financial bays are now the trends within Dubai.
Post-2000, in the last 22 years, there has been a significant movement within the MENA region regarding investments. It is estimated that the world’s most significant number of fund managers currently work in the Middle East. With Middle East’s sovereign and public investment funds diving into the global investment opportunities, the capital flow continues.
The Middle East’s most significant funds at work:
The Middle East has many sovereign funds with hundreds of billions of dollars in Assets under management. With them, there comes a series of significant investment funds available for public investment. Following are the most considerable private investment funds operating within the Middle East:
Dubai Investment Fund (DIF):
It is one of the foremost private investment funds operating in the UAE. Established in 2001, the AUM today crossed $320 billion. The firm has more than 920 industry specialists sitting on board, averaging 17 years of industry experience.
With over 7,300 clients, the client-based spreads across 61 countries. The fund has diversified investments and has continued to win market-leading returns across the sectors of the economy. Real Estate, infrastructure, healthcare, renewable resources, and other vital sectors of the economy all take place within the fund’s investment.
With its headquarters in Dubai, UAE, the has offices across the globe. A few locations include London, Mumbai, New York, Zurich, Frankfurt and others.
The current ESG-investing strategic investing policies within the DIF have recently brought DIF into the limelight.
KAMCO Investment Company:
With approximately an AUM of $14.6 billion, KAMCO is considered among the most renowned investment firms in the MENA region. With headquarters in Kuwait, the fund has a history dating back to 1998. Their presence in UAE has primarily increased over the last decade since they opened their office in Dubai International Finance Center (IFC) in 2016.
With over 24 years of experience, KAMCO has its strength in the financial markets. Offering services like wealth management, asset management, investment banking, brokerage, and even equity research, the deal values by KAMCO’s investment banking go close to $30 billion.
KAMCO is one of the fewest firms to report profit back in 2008 when the economies went into turmoil. The fund has received dozens of well-renowned awards during the last few years.
SHUAA Capital is famous for its differentiated, innovative and global product offering, focusing on public and private markets, debt and real Estate.
With two key business segments, asset management and investment banking, the assets under management go above $13 billion. The AUMs segment focuses on public markets, private markets, real Estate and debt businesses to create outstanding returns for its clients.
Emirates NBD Asset Management (EMDB)
EMDB is considered a top-5 asset manager in Dubai’s IFC. With AUMs of $6.1 billion, its core investors are the HNWIs, pension funds, SWFs, retail investors, family offices, etc.
As a subsidiary of the second-largest bank in UAE (Emirates NBD Bank with assets of $625 billion), EMDB gets an edge in growing faster. EMDB also has a REIT listed in 2017 and remains one of the only two listed on Dubai Nasdaq. The current market capitalization of the EMDB REIT is $107.5 million.
EMBD received a Global Sukuk Strategy award last year at the Bonds, Loans & Sukuk Awards.
Setup in 1995 is often referred to as the pioneer in the UAE financial markets. With 27 years of industry experience and over $6 billion in AUM, it has over 15,000 shareholders and a presence in over 23 sectors.
Dubai Investments has more than 3,800 employees in its Dubai office. It follows the UAE government’s strategy of sustainable goals. The company has been renowned for providing special consideration to projects to produce products for future generations.
The Financial Services company has over $3 billion under AUM. Founded in 2009 in Riyadh, Alkhair Capital carries a unique position among Islamic Financial Institutions.
Alkhair Capital offers Fund and Investment management solutions for corporate finance, access to capital markets and private equity management. The company is renowned for offering Shariah-compliant solutions to its clients and shareholders.
Alkhair Capital is the subsidiary of the Bank Alkhair. While it is a Saudi Bank, it is headquartered in Bahrain and has been in business since 2004.
With over sixteen years of proven history in finance and investments, Gulf Capital (GC) has ~$2.5 billion of AUM. Surprisingly, the investment team and the number of investments by Gulf Capital are comparatively small. It has 18 investment professionals and only 48 employees and currently has only 35 investments.
The firm has a strategy of investing only in significant investments and remains very particular about what it invests. The fund also follows the ESG investing practices that seek investors’ attention.
The middle East region has witnessed a turnaround in the last half century, backed by oil and fueled by economic development. The tourism, setting up of finance, and IT industries have acted as a catalyst in the growing importance of the Middle East, especially the UAE.
The finance sector has posted noteworthy progress as well. Most international banks, funds, and related industries have already set foot within the UAE.
With Gulf’s leading private funds in place, UAE is slowly becoming the hub of financial investments.