The turmoil in global financial markets since last year has set an intriguing backdrop for examination of hedge funds in the Middle East region. After more than two decades of using hedge funds, private client investors from the GCC states have become familiar with their value as a source of additional returns and downside protection in their portfolios. But the financial climate has not often presented as many opportunities and challenges as we see today, according to Antoine Massad.
To anticipate the likely path that hedge funds will follow in the region in the coming months and years, it is useful, first, to appreciate the history of the local industry. For many years GCC financial markets have been steadily liberalising, with the gradual emergence of local equity exchanges and financial services institutions. The process has received additional impetus over the past few years, as soaring fuel prices have helped to drive inward investment in the region and local regulators have introduced initiatives to help them compete with international financial centres such as London, Frankfurt, New York and Tokyo.
