In the latest Country Edition of On Reg, host Angelo Lercara is joined by partners Amanjit Fagura and Colin Sharpsmith from Dechert's Dubai office to discuss critical insights for asset managers looking to raise capital in the United Arab Emirates (UAE). Fagura and Sharpsmith provide a comprehensive overview of the UAE's regulatory landscape, investment patterns and fund structures, offering valuable guidance on navigating the complexities of raising capital in the Emirates. The episode also explores key investor groups, tax considerations, current market trends and recent regulatory changes that asset managers need to be aware of.
Show Notes:
Key Takeaways
- There has been a significant increase in the number of local funds in Abu Dhabi and Dubai, driven by changes in regulations that favor the establishment and marketing of domestic funds over foreign funds. This includes various fund structures like corporates, partnerships, and investment trusts, with an emphasis on setting up in the financial free zonesof ADGM and DIFC.
- The UAE's regulatory landscape for asset management is complex, featuring a mix of onshore and offshore regimes. Onshore activities are governed by the Central Bank of the UAE and the Securities and Commodities Authority (SCA), while offshore activities within the financial free zones of DIFC and ADGM are regulated by their respective authorities, DFSA and FSRA. This dual system allows for English common law-based regulation within the free zones, providing a distinct alternative to the civil law code elsewhere in the UAE.
- There is growing interest in diversified investment strategies, including credit (such as BDCs and CLOs), virtual assets, crypto financing, and tokenization of funds. The ADGM and DIFC have both made significant strides in accommodating these new asset classes, highlighting the region's push toward innovation in the asset management industry.
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