Matthew Pykstra, Head of FundRock Investment Management Middle East

Asset management firms from the UK, USA, Europe, India, and Asia are flocking to the United Arab Emirates (“UAE”). They are drawn by the large pools of capital held by sovereign wealth funds, family offices, and institutions. These firms are setting up funds either through mainland UAE or the free zones within the UAE, such as Abu Dhabi Global Markets (“ADGM”) and Dubai International Financial Centre (“DIFC”). Many of these funds are also invested in the Middle East and North Africa (“MENA”) region.

Challenges and considerations

Due to the uncertainty and capital outlay associated with setting up a fund and operations in a foreign jurisdiction, careful planning, budgeting, and meticulous execution are essential. For smaller to medium-sized entities, the margin for error is exacerbated by a lower ability to absorb loss-making projects, which can deter investment in the UAE.

Options for launching a fund

If you are interested in launching a fund, there are various options to consider:

·Apply for your own fund management license: You can apply for a fund management license in the UAE, ADGM, or DIFC.

·Partner with a third-party fund manager (ManCo): Partnering with a ManCo who has the appropriate fund management license in the region can be beneficial. They understand the roles and responsibilities that accompany the license.

·Hybrid approach: Initially partner with a ManCo to set up a fund and then obtain your own license at a later stage. This allows you to get the fund set up quickly without deploying too much capital initially.

FundRock ME and Apex Group: A partnership for success

The Apex Group, a fully-fledged fund administration technology provider with $2 trillion in assets under administration (as of July 28, 2024), acquired FundRock in 2021. FundRock is a leading UCITS management company and AIFM investment fund manager offering third-party ManCo services with regulated entities in 15 countries and assets under management of €220.4 billion across 1,240+ funds (as of July 28, 2024).

FundRock in the Middle East

FundRock has established operations in the Middle East. FundRock Investment Management Services (ME) Ltd (FundRock ME) is a fully authorised ManCo with a Category 3C license in the ADGM. This license allows the entity to manage Qualified Investor Funds and Exempt Funds, aimed at professional investors and market counterparties. FundRock ME offers third-party fund management services for both closed-ended funds (such as private equity, private debt, and venture capital funds) and open-ended funds (such as mutual funds and hedge funds).

Benefits of partnering with FundRock ME

·Cost efficiency: Partnering with a ManCo helps keep costs down by avoiding initial expenses on licenses, capital adequacy requirements, office space, and compulsory appointed positions in the ADGM.

·Speed to market: By partnering with FundRock ME, the speed to market of launching a fund is significantly reduced compared to obtaining your own fund management license.

·Regulatory compliance: FundRock ME ensures that the fund is considered from a regulatory, risk, and compliance perspective, mitigating the challenges of navigating uncharted regulatory territory.

If you are looking to establish a strong presence in the UAE's fund management landscape, partnering with FundRock ME offers significant advantages. FundRock ME provides a team of experts with specialist knowledge of local markets and regulations, all supported by the Compliance and Legal teams in Luxembourg. Combined with Apex Group's comprehensive services, this partnership delivers a single-source solution, enhanced by advanced technologies like the Apex Invest platforms, Apex Tempo workflow sharing tool, and Tocan digital investor onboarding platform. FundRock ME is ready to support your fund management needs with a tailored and efficient approach.