The United Arab Emirates is rapidly positioning itself as a global hedge fund centre, with a new report from IG Prime suggesting the country’s financial hubs – Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) – could reshape the $4.5tn industry, according to a report by Arabian Business.

IG Prime's State of the Hedge Fund Industry report, reveals that the DIFC had attracted 60 hedge funds as of September 2024, with ADGM following closely behind. The UAE’s appeal is being driven by a combination of favourable tax policies, access to deep pools of regional capital, and lifestyle factors, as well as proximity to some of the world’s largest allocators to alternatives.

“Everyone in the industry is talking about Dubai and Abu Dhabi,” said Max Hayden, Global Head of Prime Brokerage at IG Prime. “We’re seeing headcount rising in both centres, as large managers establish satellite offices and, increasingly, new hedge funds launch directly in the UAE.”

The report suggests that the UAE’s relatively light-touch regulatory environment may create pressure on global regulators to reassess how they oversee hedge funds. As major players like Millennium and Balyasny establish footholds in the region, the UAE’s model is emerging as a viable alternative to more tightly regulated Western markets.