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The hedge fund managers chasing millions in the Middle East

Things are heating up in the desert. Brevan Howard's Abu Dhabi office is accruing staff. Exoduspoint is hiring in Dubai. So is Millennium. So is Cubist. So is BlueCrest. So are most large hedge funds. 

While Brevan’s Abu Dhabi operation is being run by Oualid Lahsini, who was hired from Ares in August as CEO of the MENA business and head of client partnerships in MENA and Asia, it’s telling that many of its other 40 or so staff in Abu Dhabi so far seem to have been drawn from elsewhere in the business. The Middle East is the new choice for established global hedge fund managers who want to optimize their lifestyles.

“Lifestyle and financial considerations are behind the draw to the Middle East,” says Dan James, managing partner at hedge fund search firm Monroe Partners, which is opening its own office in Dubai next month. “It’s a low tax environment with brilliant weather and it offers a great lifestyle for families.”

Brevan Howard didn’t comment on its Abu Dhabi build. Lahsini reports to Natalie Faye Smith, Brevan's New York head of strategy and client partnerships, but Jonathan Candy, the head of its Singapore office, who joined from Graticule Asset Management in 2020, is rumoured to be helping find poeple. As the cost of living in Singapore rises, hedge fund sources say Singaporean hedge fund managers are at the forefront of the shift to the Emirates. The island contains a large population of talent willing to move.

Hedge fund managers of Indian provenance are also keen to go work in the Middle East, where they can live cheaply and be nearer families at home. Millennium’s well-staffed Dubai office has numerous Indians, like Sid Chaturvedi (ex-Goldman), Mudit Mehta (ex-Caxton) and Jasdeep Singh (also ex-Goldman). It’s also host to French, Britons and Italians. East Europeans are seeking sanctuary in the desert too: Exoduspoint’s Dubai office recently recruited Nikolay Aleksandrov from World Quant in Switzerland, for example.  

One Indian PM at a major multistrategy fund in Dubai says its "cultural and physical proximity" to India means Indians feel at home while chasing the "big dream" of working with top firms. "It feels like you're in Mayfair or Park Avenue," he says. "The time zone works fantastically for global market coverage. Zero tax is a bonus too."

The only nationality missing from the Emirates hedge fund party is the Americans, for whom there’s no tax benefit of moving to a potentially overheated desert location, because the US taxes its citizens on their worldwide income.

For everyone else, the tax benefits of hedge fund life in the emirates can be considerable. Many big funds pay portfolio managers 20% of PnL. When your PnL is millions, the difference between 0% and 22.5% (in Singapore) tax is therefore considerable.

Sweltering heat aside, the only other potentially downside of desert hedge fund life is the lock-ins. As funds move there and competition for staff increases, there are tales of new hires at some funds being given contracts that lock them in for two years. That sounds painful, particularly while governments in the UK and US are pushing-back against such arrangements.  

*This article has been corrected to reflect the fact that Brevan Howard didn't have a party in Abu Dhabi, so if you were a client who wasn't invited, you were not left out 

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AUTHORSarah Butcher Global Editor

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