Dubai To Establish New Commercial investment Fund

Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE, and Ruler of Dubai has issued a law to establish the Dubai Investment Fund, “an independent public entity” to drive investments in strategically important projects on behalf of the government.

The newly established fund will hold stakes in entities including utility giant DEWA, toll operator Salik and Dubai Taxi Company – which were privatised over the past years. Dubai World, whose holdings include DP World, will be affiliated with the new fund but it will preserve its “legal identity.”

The new sovereign fund will invest profits from these assts into other government funds, surpluses and the general reserve locally and internationally. It will also have the power to establish companies and investment funds, as well as to buy and merge firms.

The Dubai Investment Fund will be chaired by Sheikh Maktoum bin Mohammed bin Rashid al-Maktoum, Deputy Ruler of Dubai and the UAE’s finance minister. Abdulrahman Saleh Al Saleh has been appointed as vice chairman of the board while Abdulaziz Mohammed Al Mulla is the managing director and CEO of the fund.

The fund is also tasked with bolstering the financial stability of the emirate by financing the government’s deficit and establishing strong financial reserves to promote the emirates’ long-term financial sustainability.

It will focus on investments in stocks, bonds, and securities to achieve sustainable returns while exploring prospects in local or international financial markets.

It will also be able to deal in movable and immovable assets, manage funds, provide mortgages and guarantees, besides participating in the financial derivatives business.

The Existing Dubai Investment Fund

Dubai already has a sovereign fund, the US$320 billion Investment Corporation of Dubai (ICD), which is the principal investment arm of the government and has holdings in Emirates Group and Emirates NBD, Emaar Properties and the Emirates National Oil Company. ICD reported a 91% surge in 2023 half-year profits, driven by growth across all business segments amid strong economic momentum in the UAE. The wealth fund’s banking and transportation divisions’ respective contributions to the wealth fund’s profit soared by AED 8.2 billion (US$2.23 billion) and AED 7.7 billion (US$2.1 billion).

ICD revenues reached a record AED145.1 billion (US$40 billion) up 20% over the year, primarily driven by the growth of banking assets.

Meanwhile, Kuwait also reportedly plans to establish a new sovereign wealth fund to develop the Gulf state’s local economy, spearhead mega projects, and attract funds from foreign investors and the private sector.

Related Reading

• The Middle East Foreign Investment Trends with Focus on the UAE
• An Introduction to Doing Business in Dubai 2023

• Previous Article Japan’s Multilateral Trade with the GCC; 2023 / 2024 Status and Prospects
• Next Article Oman, India Discuss CEPA and Bilateral Trade Growth