Hesitant hedge funds tiptoe back

This time last year, the region was awash with hedge fund money betting on potential currency revaluations. But as the global financial crisis deepened, the attentions of these opportunistic investors became less welcome.

Hedge funds not only pulled out their capital – contributing to a liquidity crisis in some Gulf states – but they were also among the protagonists in a wave of short selling of regional heavyweight companies.

A year on, while risk appetite has improved and emerging markets have witnessed inflows from asset managers, hedge funds are returning only hesitantly to the Gulf.