Hedge Fund Debuts Backed by Foreign Cash Sprout Up Across #UAE - Bloomberg

Hedge Fund Debuts Backed by Foreign Cash Sprout Up Across UAE - Bloomberg

Dubai and Abu Dhabi — where some of the world’s biggest hedge funds have set up outposts in recent years — are now emerging as hubs for money managers looking to go it alone.

And even though they’re setting up shop in the United Arab Emirates, a nation with trillions of dollars of sovereign wealth, some of the most successful debuts are getting their initial backing from firms in the US and Europe.

At least five portfolio managers from top hedge funds are launching entities in the Middle East hub. The three largest are backed by Brummer & Partners, Schonfeld Strategic Advisors and Morgan Stanley.

Nikolay Aleksandrov won a roughly $500 million investment from Morgan Stanley’s asset-management arm for his new quant fund, Continuum Capital Management, according to people familiar with the matter. The portfolio manager, who previously worked at ExodusPoint Capital Management and Millennium Management, will invest exclusively for Morgan Stanley.

Nikolaus Hildebrand, who worked at Brevan Howard Asset Management and ExodusPoint, joined Brummer and is launching a trading pod, other people said, asking not to be identified because the information is private. He will manage the new Brummer Fixed Income fund, which is starting with an allocation of roughly $500 million from the firm and raised about $600 million from outside investors, the people said. It started trading last month.

Earlier this year, Omar Newera secured $500 million from Schonfeld for his Abu Dhabi-based stock-picking fund, Insight Capital Management. Initially, his firm will trade exclusively for Schonfeld.

The moves show that the UAE is becoming an attractive destination for startup managers looking to live, hire, raise money and build out trading firms. While some, including Aleksandrov, were already living in the country, others like Hildebrand moved to the UAE to launch their funds in a nation that offers a tax-free, luxurious lifestyle and the ability to trade across multiple time zones.

The UAE, which hosted just a few hedge funds a decade ago, is now one of the hottest locations for the industry, with almost all giant multistrategy firms opening offices in Dubai or Abu Dhabi. Now, rather than choosing between the two cities, some are beginning to open locations in both. Dubai appeals to younger employees seeking city lifestyles and is home to family offices that control more than $1 trillion. Abu Dhabi, whose government encourages firms to establish a presence there, offers the most fundraising potential.

Still, snagging coveted backing from the UAE’s giant sovereign wealth funds is challenging: They’re known for having less tolerance for risk, taking longer to invest and setting a high bar before deploying capital. But the biggest among them, the $1 trillion Abu Dhabi Investment Authority, already backs some of the world’s largest hedge funds and has been stepping up its use of separately managed accounts to invest in others.

“You need to have large track records to get the attention of the sovereigns,” said Richard Fenton, head of Middle East prime sales at IG Prime. “You need to go to them with something they haven’t seen before in order to compete, otherwise they’ll continue allocating with the established managers.”

Claus Rosenberg Gotthard and Martin Rasmussen chose Abu Dhabi to start Dovehouse Capital, their new multistrategy hedge fund. Gotthard is moving to the UAE from Portugal, while Rasmussen travels from Italy every two weeks.

William Isvy moved to Abu Dhabi from the UK to start an equity hedge fund that’s expected to debut next year, people said. He was previously a portfolio manager at SPX Capital and Millennium.

Another Millennium alumnus, Adel Habre, is still deciding whether Dubai or London will be the home for his new hedge fund, QuantD Capital, some of the people said. The firm will trade rates and currencies and is expected to launch in the second half of next year.

Portfolio managers from multistrats are expected to “establish their own funds and draw investments from local UAE family offices who are looking to diversify their investment strategies,” Fenton said. “It’ll grow the ecosystem here as it’s done in New York and London, and we are starting to see the beginnings of this now.”

France’s Ardian Set to Join Global Firms Planning #Kuwait Offices - Bloomberg

France’s Ardian Set to Join Global Firms Planning Kuwait Offices - Bloomberg

French private equity firm Ardian plans to open an office in Kuwait, according to people familiar with the matter, joining a growing cohort of global financial companies in establishing a presence in the Gulf state as it looks to position itself as a regional business hub.

The office, slated to open in 2026, is expected to serve as a gateway to Europe for Kuwaiti investors, the people said, asking not to be named discussing information that isn’t public. Ardian, which manages about $196 billion, would be the first major European private equity manager to set up in Kuwait.

The plans come weeks after Wafra Inc., a $28 billion money manager owned by the state pension agency of Kuwait, purchased a minority stake in Ardian. In late October, Bloomberg News reported that the pension fund — Public Institution for Social Security — was restarting private equity allocations after a hiatus, potentially unleashing billions of dollars in fresh capital into the industry.

A representative for Ardian declined to comment.

Global firms have been expanding across the Middle East, drawn by the region’s sovereign wealth funds and rich families that together control more than $1 trillion in assets. Much of that activity has centered on Saudi Arabia and the United Arab Emirates, though Kuwait has begun to attract several high-profile entrants in recent months.

BlackRock Inc. opened a branch in the country in September, followed shortly by Goldman Sachs Group Inc. and Franklin Templeton. Buyout giant Carlyle Group Inc. and State Street Corp. are also looking to establish local offices, Bloomberg News has reported.

Private equity firms have been grappling for years with a tough market for asset sales, making it harder to sell portfolio companies at acceptable valuations and dragging out the process of paying investors.

In May, the head of the $1 trillion Kuwait Investment Authority warned the industry was “very troubled,” citing practices such as continuation vehicles that can delay cash distributions to limited partners.

There are signs the logjam is beginning to ease. Goldman’s finance chief said this week that the frozen pipelines of private equity dealmaking are starting to thaw, with sponsor-led activity picking up and announced deal volumes up 40% this year.

Founded in 1996, Ardian now invests across private equity, real assets and private credit. It has around 20 offices worldwide, including one opened in Abu Dhabi in 2023. The firm manages over $27 billion for Middle Eastern clients and raised a record $30 billion this year for a secondaries fund, topping the $19 billion raised for its predecessor.

#SaudiArabia Stocks’ Worst Year in a Decade Leaves Traders Grim on 2026 - Bloomberg

Saudi Arabia Stocks’ Worst Year in a Decade Leaves Traders Grim on 2026 - Bloomberg

In a year that saw emerging-market equities roar back to life, Saudi Arabia stocks were left far behind. Investors say don’t count on next year to be much different.

They see little reason to buy Saudi stocks, with oil prices in the doldrums and likely to keep falling next year with commodities trader Trafigura predicting a “super glut.” Citigroup Inc. analysts recommend investors underweight Saudi stocks and say the shares have “screened poorly” on earnings growth and momentum.

“Saudi stocks remain rather unappealing,” said Nenad Dinic, an EM equity strategist at Bank Julius Baer & Co. “First, the Saudi stock market is still closely tied to oil prices that could stay soft in 2026; second, it doesn’t get a boost from a weakening dollar as most other EM plays do.”

The dismal outlook comes on top of this year’s 11% selloff in the Tadawul All Share Index, the biggest drop since 2015. Earnings growth is also expected to be sluggish, with analysts predicting a 2% increase in profit next year, compared with 13% growth for the MSCI benchmark.

The world’s biggest oil producer is pressured by a 17% drop in Brent crude prices, which restrains public spending along with company earnings. Furthermore, its stocks have proved sensitive to unfavorable trends in the dollar this year, Citi analysts David Groman and Rahul Bajaj said.

“There is a lack of short term trigger with potential to drive Saudi equities higher,” said Sebastian Kahlfeld, a portfolio manager at DWS Investment GmbH. While valuations have become more attractive, the improvement isn’t “sufficient to drive a significant re-rating,” he said.

The Tadawul All Share Index currently trades around 15 times expected earnings, below its 10-year average of about 16 times but still higher than stocks in the benchmark EM index as well as regional hub Dubai.

Not everyone is bearish. Junaid Ansari, head of research and strategy at Kamco Investment Co., said the Saudi market remains “oversold with an overstated concern” about oil. He sees upside in bank shares amid higher lending and profits.

Amundi SA, Europe’s biggest asset manager, expects the Kingdom’s stocks to largely track the oil market over the near-term unless it delivers on plans to remove foreign ownership curbs on equities.

This “might provide a catalyst, especially for stocks with the biggest free float, such as financials,” said Marcin Fiejka, head of equities for central and eastern Europe, the Middle East and Africa at the firm. He doesn’t expect the changes to occur during the first half of 2026.

Saudi equities rallied in September after Bloomberg reported that the Kingdom may soon ease foreign limits. The gains faded after a regulator said that policymakers haven’t yet decided whether to eliminate the cap or lift it slowly in their 2026 review.

Adnan El-Araby, an investment manager at Barings Investment Services Ltd., also has an underweight stance on Saudi stocks, which he said have experienced earnings downgrades triggered by both macro and micro variables. “Less consistent” communication on when and how the country planned to open up its market hasn’t helped either, he said.

“We haven’t increased our exposure to Saudi ahead of 2026,” El-Araby said. “Our portfolio construction will be driven by the earnings outlook of specific companies.”

Paramount’s Mideast Backing Likely Runs Deeper Than $24 Billion - Bloomberg

Paramount’s Mideast Backing Likely Runs Deeper Than $24 Billion - Bloomberg

A trio of Middle Eastern funds have agreed to stump up $24 billion to help bankroll Paramount Skydance Corp.’s bid for Warner Bros. Discovery Inc. The region’s exposure to the deal is likely larger, once its deep ties to private equity firms behind the bid are factored in.

Saudi Arabia’s Public Investment Fund and the Qatar Investment Authority joined the relatively-unknown Abu Dhabi firm L’imad Holding Co. to bankroll the hostile offer earlier this week. The funds are overseen by wealthy Gulf states that have long supplied large amounts of capital to global buyout firms.

One example is Apollo Global Management Inc., which is among firms providing as much as $54 billion of financing for the Paramount offer. Abu Dhabi’s Mubadala Investment Co. has a long-standing relationship with Apollo, and the PIF’s venture arm has invested in funds run by the US firm.

The Saudi wealth fund, alongside the QIA and Abu Dhabi’s Lunate, has also steered billions of dollars into Affinity Partners. Jared Kushner’s firm has ties to Mubadala too, after jointly investing in a Brazil-based fast-food firm alongside a unit of the Emirati entity.

Their play for Warner Bros. comes just months after the PIF partnered with Affinity on another eye-catching bid, a $55 billion buyout of Electronic Arts Inc. Kushner connected the two sides, and played a central role in the talks, Bloomberg News reported at that time.

This time around, prominent figures involved also include Larry Ellison, the billionaire with close ties to the region. The Gulf investors plan to provide capital through non-voting equity investments and have agreed to forgo any governance rights, which would help ensure bid wouldn’t need approval from the Committee on Foreign Investment in the US.

The Middle East’s latest attempt reinforces a years-long trend that’s seen regional entities emerge as bankers to the world. Collectively, five wealth funds controlled by Abu Dhabi, Qatar and Saudi Arabia deployed $82 billion last year, accounting for more than 60% of all sovereign wealth fund investments, according to Global SWF.

That cash has propped up transactions across sectors ranging from finance to artificial intelligence as governments seek to build new engines of growth beyond oil.

An acquisition of Warner Bros. will add another element: extending soft power. If the transaction materializes, Middle Eastern investors could gain a stake in marquee assets including Warner Bros. TV and film studios, the HBO business and cable channels, including CNN.

That prospect ultimately brought funds from the United Arab Emirates, Saudi Arabia and Qatar together on one transaction for the first time in years. The countries control just over $3 trillion in sovereign wealth, and deals involving all three are unusual.

“This means that either the deal is too good to pass, or there is a third party — say Affinity Partners — putting them together,” said Diego Lopez, founder and managing director at Global SWF, which tracks wealth funds.

UAE-EU free trade talks advancing rapidly, #UAE state minister says | Reuters

UAE-EU free trade talks advancing rapidly, UAE state minister says | Reuters

Free trade talks between the United Arab Emirates and the European Union are advancing rapidly, UAE state minister Lana Nusseibeh said on Thursday at a briefing with an EU commissioner.

The EU and the UAE launched the talks earlier this year, focusing on trade in goods, services, investment and deepening cooperation in strategic sectors, including renewable energy, green hydrogen and critical raw materials, the EU said in April.

The fourth round of talks is scheduled to take place in the UAE this week and a fifth round is scheduled for early next year, according to Nusseibeh.

"We're having very productive conversations," she said.

The EU is the UAE's second-largest trading partner, accounting for 8.3% of UAE's total non-oil trade.

The wealthy Gulf state is also the EU’s largest export destination and investment partner in the Middle East and North Africa, according to the UAE state news agency.

Most Gulf markets gain as Fed lowers rate | Reuters

Most Gulf markets gain as Fed lowers rate | Reuters

Most Gulf stock markets ended higher on Thursday after the U.S. Federal Reserve's interest rate cut, but gains were capped by the central bank's cautious tone on policy trajectory.

The Fed's latest projections, released after the two-day policy meeting, indicated that the median official still expects only one 25-basis-point rate cut in 2026, unchanged from the September forecast.

Policymakers continue to balance evidence of a softening labour market with concerns of persistent inflation.

Adding to the uncertainty, the recent prolonged U.S. government shutdown has disrupted data releases, pushing the critical November jobs report to December 16 and the latest inflation numbers to December 18.

Monetary policy shifts in the U.S. have a significant impact on Gulf markets, where most currencies are pegged to the dollar.

Gulf central banks cut key interest rates by 25 basis points on Wednesday, mirroring the move by the Fed.

Dubai's main share index (.DFMGI), opens new tab gained 0.4%, helped by a 2.6% rise in top lender Emirates NBD (ENBD.DU), opens new tab.

The market remains backed by solid fundamentals and a strong growth rate, which could be further bolstered by the recent interest rate cut, said Milad Azar, market analyst at XTB MENA.

In Abu Dhabi, the index (.FTFADGI), opens new tab closed 0.3% higher.

The Qatari benchmark (.QSI), opens new tab advanced 0.9%, with petrochemical maker Industries Qatar (IQCD.QA), opens new tab rising 1.6%.

Saudi Arabia's benchmark index (.TASI), opens new tab, however, eased 0.1%, hit by a 1.7% fall in major oil producer Saudi Aramco (2222.SE), opens new tab.

Oil prices fell on Thursday as investors shifted focus back to Russia-Ukraine peace talks and monitored potential fallout from a U.S. seizure of a sanctioned oil tanker off the coast of Venezuela.

Crude prices are hovering near multi-month lows, putting pressure on the fiscal balances of oil-dependent Gulf nations through lower revenues.

Outside the Gulf, Egypt's blue-chip index (.EGX30), opens new tab lost 0.1%.