Dubai sets up new fund to oversee government investments

Dubai has set up a new fund as an independent public entity to oversee all government investments under a law issued by Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai.

The Dubai Investment Fund, which will operate on a commercial basis, will have the financial and administrative independence to pursue its objectives along with the legal mandate to do so, the Dubai Media Office said on Monday.

The investments “will seek to generate returns benefiting both current and future generations while implementing best practices and the investment policy” approved by the fund’s board, which will be chaired by Sheikh Maktoum bin Mohammed, First Deputy Ruler of Dubai.

The fund also seeks to bolster the financial stability of the Dubai government by financing its deficit and “establishing strong financial reserves”, the media office said.

The Dubai Investment Fund, “without infringing upon the powers and jurisdictions granted to the Investment Corporation of Dubai”, will invest government surpluses, establish companies and investment funds independently or in collaboration with third parties, acquire or merge companies, projects and funds, besides holding stakes in them.

It will focus on investments in stocks, bonds and securities and can explore prospects in local or international financial markets.

The fund will function as Dubai’s vested authority when it comes to owning shares in listed entities such as the Dubai Electricity and Water Authority, Salik Company and Dubai Taxi Company (DTC), the media office said.

Dubai announced plans in November 2021 to list 10 state-owned companies to increase the size of its financial market to Dh3 trillion ($817 billion).

Four of the 10 state-owned enterprises listed on the Dubai Financial Market last year.

The listing of Dewa was the largest GCC initial public offering last year, raising $6.1 billion. State-owned Tecom, Salik and Empower collectively raised $2.2 billion in June, September and November 2022, respectively.

Meanwhile, DTC started trading on the DFM this month after raising Dh1.2 billion in an IPO that was 130 times oversubscribed.

The fund will “relieve the Dubai government of rights and obligations related to companies, specifically in the context of ownership of shares comprising the capital of such companies, as also all contracts, agreements, commitments, deposits, bank accounts and loans associated with such shares”, the media office said.