Lionhart aims to attract $2bn from Gulf

The Lionhart Group, an alternative investment management group that specialises in global multistrategy arbitrage, aims to attract $2 billion (Dh7.4bn) of investment from the Gulf in the next few years through its new branch at the Dubai International Financial Centre.

The regional office has two main roles. The first is to pull in cash from the Middle East and North Africa (Mena) for its investment and hedge funds, and the second is to expand the group's investments in regional markets.

"We have had relations with GCC investors for a long time," Jim Quinn, Chief Operating Officer of Lionhart Middle East, told Emirates Business. "Around 10 per cent of our assets under management are from the region and these relations started 10 years ago.

"We are planning to build on these relations to attract around $2bn of GCC investments into our funds during the next two to three years. "We are opportunistic and the Mena region is witnessing major economic developments. We have two flagship investment funds with total assets under management of $500m.

"Only two per cent of these assets are invested in the Mena region, in fact in UAE markets. We ignored investments in the region for a long time and we are here to expand our investments in regional markets.

"There are growing opportunities and we are looking at investments to benefit from the economic growth in the region."

Quinn defended hedge funds, which have been accused of pushing up commodity prices.

"Hedge funds are opportunistic in global markets, searching for cheap assets and waiting until prices appreciate," he said. "In fact this is the way of all investors in financial markets.

"There are increasing accusations that hedge funds are manipulating the markets. There are around 8,000 hedge funds with estimated assets under management of around $2.5 trillion. This represents three or four per cent of total invested assets in financial markets.

"With this percentage hedge fund cannot have this huge impact on global markets. They are seeking to exploit opportunities in these markets through efficient means. They are adding to the efficiency of the markets in general terms."

Quinn said the increasing prices of soft commodities, energies and metals were the result of changes in the global economy and increasing demand from China and India.

"There is a strong long-term upward trend in these markets and we cannot ignore the fact that hedge funds are opportunistic and they will continue to invest in these areas because there are high potential opportunities.

Quinn said Lionhart was discussing with regional financial bodies the possibility of launching a Shariah-compliant fund.

"Our investments in natural resources, commodities and mining are very close to Shariah rules and we would be foolish to ignore this sector. We are discussing with certain regional bodies creating a fund that is properly compliant with Shariah. We hope to launch this fund next year."

Quinn voiced concern over the increasing calls for regulations to monitor investments by hedge funds and sovereign wealth funds (SWFs), saying that these funds did not need to be fully transparent about their investments.

"I think the issue of liquidity has a huge impact on the global economy and the credit crunch created tightness in liquidity. It was healthy for the global economy when SWFs and governmental investment bodies from the Middle East intervened to invest in multinational corporations and financial institutions," Quinn added.