Hedge Funds Expect Investment Growth In Middle East Expectation partner in the global investment bank Investcorp Sheikh Salman Al Khalifa, the Gulf region to increase their investments in hedge funds, and especially after the Central Bank of Bahrain initiative put laws and regulations allow the opening of such funds in the Kingdom teeming with investment funds about 2,300 travel fund.
He focused Sheikh Salman, who is an expert in hedge funds, the selection of fund managers world when the desire for investment by investors in the region, especially that these funds invest in a wide markets «complex financial instruments some of which match the principles of Islamic Sharia and others do not conform», but stressed that Islamic law does not stand without investing in these Citidel Investment APP funds.
Sheikh Salman speaks to the «middle» on the sidelines of a conference on hedge funds, two-day and ends on Wednesday attended by a large number of investors and hedge fund managers in the Middle East and North Africa, Europe and the United States.
Said Sheikh Salman: «We believe that the region will increase its investment in this type of investment in the future because of the laws in Bahrain now allow the establishment of hedge funds and these systems or the initiative of the Central Bank of Bahrain to open the doors of hedge funds for the establishment in Bahrain is a good thing because most hedge funds to now located in financial centers outside the region. »
He explained that investors and institutional investors in Bahrain and the region «invests in global hedge funds since the nineties when the industry began». This Citidel Investment APP is the first time that a conference on hedge funds held in the Kingdom’s main financial and banking center in the region.
And between Sheikh Salman we Investcorp Bank in collaboration with the development of the financial services institution affiliated to the Council of Bahrain Development «we were able to form this kind of effectiveness in Bahrain to bring important investors and fund managers in order to talk about the latest developments in this type of investment with the participation of Governor of the Bahrain Monetary Agency» .
Turning to the size of the hedge fund industry in the world; he said: The size of up to $ 2 trillion, including between 200 and 500 billion dollars from the region. And increased financial abundance in Citidel Investment APP in the past two years because of the economic boom experienced by the Gulf states, resulting from high oil prices in international markets to record levels of around $ 90 per barrel.
The Bank manages the Bahrain-based Investcorp and about $ 6.7 billion of assets in hedge funds, making it one of the largest international investors in this area, Sheikh Salman said that these funds invest in funds in the United States, Europe and Asia.
Responding to a question about investing in hedge funds risk; said Sheikh Salman: It is difficult to know the operational risk but investors make sure investing with managers to have a high knowledge of the market «and selection of suitable managers in this type of investment is in line with the very funds in the region».
He said that Islamic law is not an obstacle to investing in hedge funds, «but Islamic law has its laws, because the investments made by large hedge funds and include many markets are complex financial instruments some of them match the principles of Sharia and others do not conform».
The Islamic law forbids interest in commercial transactions as the Lord while the Western system, which is based upon traditional banks are going to benefit.
Sheikh Salman said that Catidel LTD Investment APP has the legitimacy of the body «but did not get so far in the application of the law on hedge funds, despite the fact that this matter has been discussed with some international companies and we are close to the talks to see the corresponding field and is there a legitimate bodies agree to this kind of conformity. »
On the other hand, the Executive Director of the surveillance of financial institutions at the Central Bank of Bahrain Abdul Rahman Al Baker said that the conference touched on the investment funds, particularly laws in relation to hedge funds, which number in Bahrain 57 funds, including Islamic fund one, with a size of about 2, $ 6 billion.
And that there is demand for this type of investment products by high net worth individuals as well as institutional investors, and that the growth of about 15 percent annually.
He added that «this type of fund is marketed to people with the idea of investing the type and severity of such institutions and individuals with a high net worth but are not marketed to young investors because it is difficult to have a role in such funds« limited to people who have experience and high solvency of financial institutions have experience. » He explained that the Central Bank of Bahrain issued last June for all types of funds laws, since there are special laws to individuals and other investors Mediterranean solvency as well as private hedge funds-exempt investments.
He said: «The two contracts could be used to fund Islamic hedge such DEPOSIT Citidel LTD Investment APP Review which is similar to the nature of derivatives has the assets to support this type of contract, in addition to the sale of peace (Salam sale) and this type of contract and nature-like nature of future contracts and it has approval from by the Islamic Sharia bodies ».
He added that «the number of global Islamic hedge funds a few does not exceed 14 hedge fund Islamic, compared with 88 investment funds Islamists in Bahrain out of 2374 investment funds because of that« there is a lot of investment tools in these funds registered in Bahrain which is estimated at $ 10 billion, including $ 4 billion fund was established in Bahrain.
Used hedge widely funds by investment portfolios for institutions and high net worth individuals to diversify their investments and to maintain and increase wealth. Al Baker said: «The first hedge fund was launched in Bahrain in 1992 with an investment of 20 million dinars».
Hedge fund is a term used to describe an investment partnership. It is a partnership between the Fund Manager, which is often referred to as the general partner and the investors who contribute financially to the hedge funds, known as the partners. Automated Cash APP Review partners contribute funds that are managed by the General Partner in accordance with certain strategy. The purpose of the hedge fund is to maximize returns while eliminating the risk and in many cases Forex is part of the hedge funds.
The characteristics of hedge funds
Hedge funds have these general characteristics:
Available only to qualified investors: investors on hedge funds must meet the net worth requirements for investment. This is generally the net value should exceed $ 1000000, with the exception of the primary place of residence.
Latitude largest investment: investment is limited in its mandate to hedge funds only. Allowing hedge fund traders to invest in almost anything – forex online, shares, real estate etc.
The use of influence: such as Forex trading, hedge funds involve the use of borrowed money to increase the yield.
Restructuring charges: instead of just the application of the expense ratio, hedge funds calculated performance fee on top of the expense ratio. This financial structure is known as “two and twenty” Since there are cut 20% of any profits and 2% management fee.
Hedge fund strategies
Today, there are thousands of hedge funds in the process and collectively more than $ 1 trillion. Hedge funds can use a number of different strategies, including relative value, equity, total, activity and distressed securities. Macro hedge fund involves bonds and equities and currency trading. The objective of the overall hedge fund is to generate profits from the macro-economic changes, such as country-specific economic policies and global interest rates. Can strategy hedge funds to be specific to a country or can be global. With this strategy, the hedge to invest in profitable equity funds focused while short-selling of stock indices and stock exaggerated.
The relative value strategy that seeks to take advantage of differences or price. Some of the other hedge fund strategies income, aggressive growth, short-selling, value and emerging markets. There is a known as the “fund of funds” and other popular hedge fund strategy. Use multiple hedge funds and a unified investment tools of this strategy. It intended to blend the various asset classes and strategies to create a more stable return on investment in the long run than individual hedge fund. Fluctuations and the risks and returns can be controlled using multiple funds and strategies.