ING Investment Management yesterday announced plans to launch its first Middle East fund later this year with assets under management of $1 billion (Dh3.7bn).
And the company – part of the Dutch-based ING Group – plans to increase its total investment in the region's markets to $5bn over the next three years. The new fund will be launched in the third quarter.
"The fund will invest in the booming Middle East equity markets and we expect the majority of subscribers will come from global markets outside the region," said Grant Bailey, CEO of ING Investment Management Middle East, during the inauguration of the company at the Dubai International Financial Centre.
"Globally we had total assets under management of $581bn at the end of March this year, including $117bn in the Asia-Pacific region. A total of 25 per cent of our investments are focused on emerging markets. The Middle East represents 2.3 per cent of the total investments in emerging markets."
He said ING would raise capital from institutional and high-net-worth clients in Europe and the Asia-Pacific region for its Middle East and North Africa (Mena) Equities Fund. Existing investments were focused on Egypt and Jordan.
"However, we plan to invest in equity markets in the UAE, Kuwait and Qatar very soon so the total Middle East stake in our emerging markets investments will surge to five per cent.
"ING Investment Management will produce and export locally developed Mena investment vehicles to global investment community, while offering a complete spectrum of sophisticated and innovative products to regional investors.
"Global investors remain unexposed to the region. The demand is there but the supply is not. By putting an investment team on the ground here, ING is able to develop high performing local funds, then export these through our extensive global network.
Farah Foustok, ING's Chief Investment Officer, said: "We have plans to launch a fixed income fund immediately after launching the Mena Equities Fund. Our strategy depends on close fundamental assessment of equities in the region to ensure long-term profits.
She said transparency was becoming very important for all companies in the region and this would encourage more foreign investment to flow to equity markets.
"Next year we will start studies on launching a Shariah-compliant fund but this will depend on the studies and the needs of our clients. We already have Shariah-compliant funds in the Asia-Pacific region but we intend to introduce Islamic funds that suit the Middle East."
Bailey said that the ING Investment Management office in the DIFC was the 13th branch of the group in the Asia-Pacific region. "We studied options to open the office in Qatar or Bahrain but the DIFC regulations are of international standard".