Hedonova navigates the future of alternative investment in UAE

The global hedge fund underlines strategies for success in UAE's alternative investment market

By Alexander Cavendish

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Published: Wed 26 Jul 2023, 6:28 PM

Hedonova, a US-based hedge fund, is strengthening its UAE portfolio as it navigates the promising future of alternative investments in the GCC market. As a premium hedge fund that specialises in alternative investments, Hedonova’s team affirms that the future of alternative as well as sustainable investments in the UAE holds great potential. The up-and-coming hedge fund in the region is keen on providing appealing, lucrative opportunities for those seeking higher yields and portfolio stability.

Alternative investments are already gaining popularity, offering investors in the UAE new options and diversification beyond traditional assets. Seasoned investors like Warren Buffett, Carl Icahn, and George Soros have achieved remarkable results through ventures into private equity, hedge funds, and real estate. Naturally, as investors in the UAE become more curious about alternative investments, they also wonder whether alternative investments can outperform traditional ones in terms of generating higher profits.

Alexander Cavendish, co-founder and CEO at Hedonova, opines, "Today, with the government taking proactive measures to create an investor-friendly environment, and the UAE ranking 16th globally in the World Bank's Ease of Doing Business report, alternative investments are poised to gain prominence in the UAE market, over the next decade, as the economy diversifies, and regulatory frameworks become more accommodating. While alternative investments can outperform traditional ones in terms of generating higher profits, understanding the risks and unique, high-yielding characteristics of alternative investments is crucial for investors as they explore this asset class."

New laws, regulations, and dedicated financial centres create a conducive environment for alternative investments. The Dubai International Financial Centre (DIFC), for instance, has grown significantly, with $4.54 billion AUM in 2022. Despite global uncertainties, the UAE's commitment to economic diversification opens opportunities beyond traditional investments. Alternative investments in technology, renewable energy, real estate, and non-oil sectors align with the country's long-term growth strategies.

With 74 per cent of investors in the country expressing the importance of leaving a positive legacy, according to a Standard Chartered survey, the UAE also demonstrates a strong commitment to sustainable investing. Institutional investors and family offices with significant exposure to private equity share similar trends. The UAE's target to generate 50 per cent of its energy from clean sources by 2050 presents substantial investment potential in the sustainable investments and renewable energy sector. As the government prioritises food security and local production, investments in agri-business and sustainable farming, will also gain traction, according to the experts at Hedonova.

While the future of alternative investments in the UAE appears bright, approaching with caution and understanding associated risks are vital for success. Investors can position themselves for growth and resilience by partnering with alternative investment experts like Hedonova, who guide diligently through a strategic decision-making process, and comply with regulatory frameworks to seize emerging opportunities in the market.

The UAE's alternative investment market offers a promising landscape for investors. By embracing the potential of alternative asset classes, investors can benefit from higher returns and contribute to the country's sustainable and diversified growth in the years to come.

For more information on Hedonova, please visit hedonova.io.

— Alexander Cavendish is the CEO at Hedonova.

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