eFinancialCareers

The Central Bank of Bahrain (CBB) expects an influx of hedge fund managers after giving them the green light to enter the region.

Increased investor risk appetite and a surge in high-net-worth individuals (HNWIs) in the country have prompted the CBB to revamp laws dating back to 1992. The new rules classify hedge funds as ‘exempt’, which makes it much easier for them to set up shop in Bahrain.

Abdul Rahman Al Baker, CBB executive director, financial institutions supervision, says he expects hedge funds – currently numbering 57 and worth a collective US$2.6bn – to increase in number by 10% a year.

“The demand for high risk investments from both institutional investors and HNWIs in the MENA region is increasing. Strong economic growth and high liquidity makes Bahrain an attractive place to invest,” he says.

The new rules already seem to be having the desired effect. There are currently 22 applications in the pipeline and 12 hedge funds have popped up in Bahrain since the new regulation cleared the way in June.

Al Baker believes Bahrain will see both local players starting new funds as well as international hedge fund managers moving to the region.

Where will all this hedge fund talent come from? Al Baker predicts it will be drawn from London and New York. Michael Ketley, managing director of Middle East recruiters MRK, says switched-on hedge fund managers are already contemplating the Gulf: “You’re unlikely to see the head of hedge funds at Blackstone moving there – it would be professional suicide – but the more savvy ones would be looking closely at it. Particularly, those with an existing Muslim or Middle Eastern connection.”

Headhunters reckon the pressures on the US dollar have driven up salaries in the region and a senior hedge fund manager could expect to earn $350k to $400k, plus a bonus.