The Carlyle Group, one of the world's biggest buyout firms, is setting up the first investment funds in the Dubai International Financial Centre (DIFC) under new regulations designed to make fund management in the financial free zone easier and cheaper.
Put into place in July by the Dubai Financial Services Authority (DFSA), the DIFC's regulator, the new rules allowed financial firms to manage funds out of the centre without having a physical presence there and lifted restrictions on marketing them to potential investors. Fees to apply for a license to manage funds were reduced to $10,000 from $40,000 previously. Additional regulatory exemptions were also established for sophisticated investment products.
"The DIFC's stature and importance as a financial hub is growing." Walid Musallam, the managing director and head of Carlyle in the region.
Marwan Ahmad Lutfi, the DIFC Authority's deputy chief executive and head of business development, said: "Carlyle utilising the new funds regime underlines the DIFC's position as the region's most competitive financial centre for fund managers in the region.
"By using the DIFC as the platform from which to base its funds, Carlyle is demonstrating that the DIFC is a prime location for both foreign and domestic fund managers."
The DIFC's leadership is hoping Carlyle's move to the new fund license - it had previously been registered with the DFSA under the old regime - presages a flood of registrations as other financial companies take advantage of lower fees and looser restrictions on marketing. The changes to the funds regime, enacted by the DFSA after consultation with fund-industry players, is a key cog in the centre's strategy to remain competitive as a regional financial hub.
"The new funds regime is a testament to the DIFC being a domicile of choice for private equity firms, and we are pleased to be the first such firm to benefit from the law," said Walid Musallam, the managing director and head of Carlyle in the region. "The DIFC's stature and importance as a financial hub is growing. We see great investment promise throughout the MENA region and look forward to building upon the many valued relationships we have developed."