First Gulf Bank Launches Macro Hedge Fund In UAE

by Carla Johnson, Investors Offshore.com

24 January 2006

First Gulf Bank, which recently announced a huge 331% increase in annual profits, on Monday launched its first open-ended macro hedge fund, which is designed to give investors low risk absolute returns that are not correlated to conventional stock and bond markets by investing in alternative assets such as property, particularly in the fast growing emirate of Dubai, AME Info reported yesterday.

According to Andre Sayegh, the bank's Chief Operating Officer, the fund, known as Al Saqer, will not be restricted to investing in any one asset class and will use a broad range of instruments and derivatives in numerous different markets, such as currencies, government and corporate debt securities, interest rate instruments, equity securities, stock indices, real estate and metals.

Mr Saygeh also pointed out that while most hedge funds marketed in the United Arab Emirates are based in the traditional asset management centres of London, New York or Tokyo, Al Saqer will be based in the UAE and aimed squarely at the country's high-net-worth and institutional investors.

"We believe this Fund to be unique, whereby we will reserve the right to invest in the booming property markets of Abu Dhabi and Dubai, and elsewhere for that matter," he stated.

The Al Saqer fund will also invest in other geographic locations, but will focus primarily on the Gulf Co-operation Council states of the United Arab Emirates, Kuwait, Qatar, Bahrain, Oman and Saudi Arabia.

The minimum initial investment level for the fund has been set at AED1 million (US$272,000). Minimum monthly subscriptions are AED500,000. Investment is open to all except US nationals.

Last week, First Gulf Bank announced a net profit of AED1.06 billion, up 331% from the AED254 million profit that the bank made in 2004. Total operating income in 2005 was Dh1.4 billion, up 188% compared to total income of AED495m in 2004.

The bank's total assets increased by 105% in 2005, reaching AED26.3 billion, compared to AED12.8 billion in 2004.

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