The Middle East may have its mojo back, as far as foreign fund houses are concerned. Nomura Asset Management has become the latest in a line to have recently opened an office in Dubai, with more said to be in the pipeline.
The main aim of the move is to engage more closely with institutional clients in the Gulf and provide a better standard of service, noted Tarek Fadlallah, the newly appointed Middle East chief executive of Nomura AM. Transparency and regulations are also becoming increasingly important to regulators in the region, he told AsianInvestor.
“We are also keen to express our commitment to the region and to use the platform to attract international capital to the region over the long term,” he added.
Nomura AM is not planning to build a retail business in the Middle East, said Fadlallah. But he doesn't rule out putting investment staff on the ground, “subject to developing business scale and additional licensing”.
The firm does not aim to domicile funds in the Dubai International Financial Centre (DIFC) under what is a relatively new framework for doing so*. “Our institutional clients prefer segregated accounts and otherwise we are focused on our Ucits funds platform,” said Fadlallah.
Nomura AM already runs close to $7 billion for institutions in the Gulf region including pensions and sovereign wealth funds, mainly in Japanese and Asian equities, as well as global fixed income. “We will focus on these and related high-conviction strategies,” added Fadlallah.
The business started on May 14 and the team is already in place, supported by resources in London and Tokyo. Fadlallah declined to specify the headcount in Dubai. “We plan to grow it in line with business opportunities and the growth in assets,” he noted.
The group's wholesale business, Nomura International, already has a presence in the DIFC, but Nomura AM is a new and separately regulated entity there, also licensed by the Dubai Financial Services Authority.
However, it does not plan to obtain a licence from the UAE Securities and Commodities Authority, which would allow it to sell to the retail market in neighbouring emirate Abu Dhabi, for example.
Asked whether other offices might be on the cards in the future, Fadlallah says there are no such plans at this point. “But we don't deny the possibility that we may expand our regional footprint in the future.”
Before being appointed to his new role last month, Fadlallah has held various roles at Nomura International. He has 25 years of experience in the financial sector, including spending the past 16 years in the Gulf.
Other fund houses have also been expanding Dubai or are planning to do so. UK-based Ashmore is believed to be working on building a presence in the region. And Aberdeen AM is said to have decided to set up a sales and client-servicing office in Dubai.
It was reported in early February that Wells Fargo Asset Management in the process of putting staff there, and Lazard Asset Management in the same month hired Farah Foustok and her team from ING Investment Management.
Moreover, BNY Mellon Asset Management in February hired Imad Abukhal from Western Asset as its first head of Middle East and Africa based in Dubai. And First State has reportedly said it will open a branch in the emirate by the end of June.
* See the latest (June) issue of AsianInvestor for a feature on the rivalry between Abu Dhabi and Dubai to stake their claims as regional asset management hubs.