Bringing you live news and features since 2006 

Craig Roberts Apex Fund Services

Middle East rife with opportunities


For hedge funds, the timing has never been better. There are several developments in place currently to exploit the investment opportunities that are abound in the Middle East.

For hedge funds, the timing has never been better. There are several developments in place currently to exploit the investment opportunities that are abound in the Middle East. And while there are still some restrictions to exploit these opportunities, the correct support – in terms of service providers, can make sure that hedge funds capitalise upon the full value.

Of late, the volatility in the Middle East markets and perceived value to be gained from current levels is a strong driver for funds in the region. There are also significant improvements in other aspects of the market in such areas as corporate governance. This should lead to increased confidence by managers to evaluate opportunities. 

But while there are many areas of opportunity for managers to consider, there are still significant restrictions in gaining access to products to exploit this volatility and value scenario. Restrictions on foreign ownership and short-selling can limit the ability of managers to fully implement some strategies.

More institutions are offering products which are enabling access to opportunities, but there is still some way to go before these can be fully exploited. 

In terms of products, absolute return strategies should feature strongly in new products launched, however, as mentioned above, there is still some weakness in that the ability for these strategies to be fully operational due to market structural constraints – for example liquidity, and a narrow range of securities that such strategies can be applied to. Where there is access is available, it may be relatively expensive in terms of both cost and timing, further limiting the scope for application of absolute return strategies. 

As more regionally-based institutions expand their services to offer this access, the impact of costs and execution timing should improve greatly and be available over a wider range of securities.

At the moment, most strategies are still long only, although some managers are now applying some hedge features through products such as total return swaps. We expect to see that the introduction of ETF’s, which will also provide a new alternative for managers to manage exposure.

The traditional long only strategy is commonly understood by regional investors. Managers offering total return profiles may need to take extra efforts to explain the benefits to investors and there may also be some conflict with the investors own ethical criteria, such as compliance with Sharia’a.

While we expect to see an increase in absolute return style strategies, long only strategies will still be an important feature of the regional market offerings. 

With many opportunities opening up, it is critical to ensure that the full value is capitalised upon. This can be done with the help of an experienced service provider that knows the path. Apex is a specialist fund administrator with a wide global presence. As such, we already have the tools to support the new market developments in the Middle East and know how to adapt these to the particular requirements of the market.

We are constantly aware of the structural changes taking place in the market and of the product developments being introduced by institutions such as prime brokers and regional investment banks. Our offices in Dubai and Bahrain are able to respond to managers and their investors promptly and with a full understanding of regional requirements – this adds great value to the service we provide. 

By Craig Roberts, CEO, Apex Fund Services (Dubai) 


Click here to download the Hedgeweek Middle East Special Report 2009

Latest News

Morningstar has published a review of the European ETF market for the first quarter 2024, which finds that it gathered..
ETF data consultant ETFGI reports that assets invested in the global ETF industry reached a new record of USD12.71 trillion..
Calastone has published an ETF white paper which examines several of the processes that take place across the lifecycle of..
Adapting product lines to fit into changing methodologies and meet shifting demand is essential to remaining relevant in the industry..

Related Articles

Kristen Mierzwa, FTSE Russell
Index Investments Group (IIG), a division within index provider FTSE Russell, has extended its range of indices through two new...
US ETF issuers of active ETFs are facing an increase in fees from the big custodian firms, such as Charles...
Taylor Krystkowiak, Themes ETFs
Themes ETFs opened its doors in December 2023, with an introductory suite of 11 ETFs – seven thematic and four...
Konrad Sippel, Solactive
At the end of March, financial index specialist, Solactive, published its 2024 annual report on future trends.  ...
Subscribe to the ETF Express newsletter

Subscribe for access to our weekly newsletter, newsletter archive, updates on the site and exclusive email content.

Marketing by