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Royal Capital plans fixed income, hedge funds

By Reuters

Royal Capital, an Abu Dhabi-based investment firm, plans to focus on fixed income funds as it taps growing investor demand for the Middle East and North Africa (MENA), its head of asset management said.

The two-year-old firm, capitalized at Dh300 million ($81.7 million), has already launched two small funds totalling Dh50 million.

"We will develop the funds business because it is business of scale. Investor appetite is increasing for certain funds like fixed income," Ahmed Talhaoui told Reuters.

While equity markets have been muted in the region, fixed income markets are performing well, Talhaoui said, adding there are not many offerings for fixed income in the region.

Royal Capital launched the Dh25-million MENA Fixed Income Plus Fund last March which has more than doubled in size. A second fund, the MENA Multimarket Strategy Fund, launched in January is also seen doubling to Dh50 million by March due to strong investor commitment, he said.

"Our third will be a hedge fund. It is a question of timing, possibly this year," he said. Details of the size are yet to be finalized.

Royal Capital, owned by United Gulf Bank of Bahrain, is also working on an initial public offering for a real estate firm in the Gulf that could come to the market before end of 2011, said Imad Abukhlal, Royal Capital's executive director, declining to elaborate.