Carlyle Group Debuts New DIFC Funds Regime

by Lorys Charalambous, Tax-News.com, Cyprus

03 January 2011

The Dubai International Financial Centre (DIFC) has announced that the Carlyle Group, a global alternative asset manager, will be the first company to establish and manage investment funds for sophisticated investors in the DIFC under a new legal and regulatory process.

The new Collective Investment Funds Regime, enacted in the DIFC in July 2010, established a stream-lined regulatory process similar to regulatory regimes in the US and elsewhere that exempt certain investment funds from government registration if they cater exclusively to sophisticated investors and are subject to certain disclosure and marketing restrictions.

Marwan Ahmad Lutfi, Deputy CEO and Head of Business Development of the DIFC Authority, said: “By using the DIFC as the platform from which to base its funds, Carlyle is demonstrating that the DIFC is a prime location for both foreign and domestic fund managers."

“The DIFC introduced the new Funds Regime following recommendations made by a panel of market practitioners. We wanted to gauge what the funds community really wanted in order to create an environment which would stimulate further growth of the industry. The regulatory changes bring the DIFC in line with other leading financial hubs around the world.”

With this new regime (Category 3 License), Carlyle's investment team in Dubai, outside of the DIFC, will be able to establish and advise investment funds domiciled in the Centre. As a result, Carlyle has established Carlyle MENA Investment Advisors Limited, an investment vehicle that will partner with its existing regional fund Carlyle MENA Partners, LP. This new vehicle will not raise additional investment capital. Under its former regulatory structure (Category 4 License), Carlyle's investment team in Dubai was only authorized to provide advisory services to an investment fund domiciled outside of Dubai.

Walid Musallam, Managing Director and Head of Carlyle's MENA team, said: “The new Funds Regime is a testament to the DIFC being a domicile of choice for private equity firms, and we are pleased to be the first such firm to benefit from the law. The DIFC's stature and importance as a financial hub is growing. We see great investment promise throughout the MENA region and look forward to building upon the many valued relationships we have developed.”

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