Dubai Launches New Investment Fund to Bolster Economic Resilience

Additionally, Dubai's more lenient residency rules have contributed to its attractiveness as an investment destination.

Dubai is taking a strategic step to enhance its financial stability by establishing a new investment fund that will hold shares in some of the emirate’s key companies.

This initiative aims to capitalize on Dubai’s rapid growth and economic resilience in recent years, especially in its real estate market, driven by Russian demand and a swift post-pandemic economic rebound.

Additionally, Dubai’s more lenient residency rules have contributed to its attractiveness as an investment destination.

The newly formed fund, as announced by the Dubai Media Office, will include stakes in prominent state-owned entities such as the Dubai Electricity and Water Authority, Salik (the toll-road operator), and Dubai Taxi, among others.

Its primary mandate will be to manage government funds, surpluses, and general reserves, with a specific focus on investments in both domestic and international stocks and bonds.

Tarek Fadlallah, the CEO of Nomura Asset Management in the Middle East, expressed confidence in Dubai’s improved fiscal position, highlighting its robust economic standing.

Across the Gulf region, sovereign wealth funds are actively deploying capital both domestically and globally, capitalizing on higher oil prices to diversify their economies away from hydrocarbons.

Saudi Arabia and the United Arab Emirates, in particular, have been pursuing international investments through state-backed entities, with the goal of transforming domestic companies into global players.

It remains to be seen how the newly established fund will differ from Dubai’s existing sovereign wealth fund, the Investment Corporation of Dubai (ICD). ICD, founded in 2006, holds significant stakes in various companies, including Emirates airline, Emirates NBD, Emaar Properties, and the Emirates National Oil Company.

Dubai World, which owns DP World, a global ports operator, will be affiliated with the new fund while retaining its legal entity status, according to the statement.

The fund will be chaired by Sheikh Maktoum bin Mohammed bin Rashid al-Maktoum, the deputy ruler of Dubai, the finance minister of the UAE, and the son of the Dubai ruler.

Sheikh Maktoum has played a key role in overseeing the sale of stakes in companies like DEWA and Salik, with DEWA notably raising $6.1 billion in an initial public offering last year.

This move signals Dubai’s commitment to further strengthen its economic position and capitalize on emerging opportunities in the domestic and international investment landscape.