(Bloomberg) -- Dubai is opening a building dedicated primarily for hedge fund startups looking to expand into the city that’s emerged as a growing hub for the sector in recent years.
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The Dubai International Financial Centre is retrofitting a building to cater to firms looking for short-term, plug-and-play offices as they pilot their operations before scaling up, according to people familiar with the matter. The DIFC Hedge Funds Centre is slated to open by the end of April.
The financial free-zone expects to have 20 to 30 contracts signed by year-end, taking up most of the 10,000-square-foot (929-square-meter) building’s capacity, one of the people said, declining to be identified discussing confidential information.
It’s preparing for an influx of such managers after gauging demand for the space at recent roadshows in San Francisco and New York. Most firms that have expressed interest are from the US and the UK, though some from Singapore, Hong Kong and India are also likely to be part of the mix, a spokesperson for the DIFC said, confirming plans to open the building.
The new space will be housed in the financial district’s former court building. Tenants will have access to communal areas for networking, facility management and an environment already set up with desks, receptionists and trading capabilities, as soon as the regulator grants in-principle approval.
The development marks a shift for the emirate, which is now seeking to lure smaller spin-outs and independent launches after previously having drawn some of the biggest names in the industry. Dubai has a roster of 75 hedge funds — from Andurand Capital Management to Point72 Asset Management — the majority of which manage more than $1 billion in assets.
The move will also create additional space for established managers, given nearby locations — including the ICD Brookfield tower that’s popular among hedge funds — are at close to full occupancy. Rents at the Hedge Funds Centre will be more affordable, the DIFC said.
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Money managers have been moving to the United Arab Emirates in recent years, lured by its tax-free income, year-long sunny weather and a timezone conducive to trading across Asia, the UK and Middle Eastern markets. Dubai has also offered perks like reduced licensing fees and capital requirements.