Challenges Faced by Hedge Fund Managers in the UAE: A Harsh Reality

Hedge fund professionals in the UAE are facing significant challenges, including high turnover rates and minimal job security. With the upcoming summer heat, many are reconsidering their relocations. The instability of employment practices and increasing living costs add to the difficulties in finding sustainable positions in this booming market.

Hedge fund managers in the United Arab Emirates (UAE), particularly in Dubai and Abu Dhabi, have recently experienced a surge in interest as numerous funds establish offices in these cities. Dubai is set to launch a dedicated hedge fund building in April, while Abu Dhabi has developed a designated hedge fund island. However, as the summer heat approaches, some professionals in the hedge fund sector are reconsidering their positions in the region.

The job environment in the UAE is reportedly characterized by a high turnover rate. One buy-side consultant remarked, “The lifestyle here can be amazing, but the sector is literally hire and fire,” emphasizing the precarious nature of employment. He noted that job security is notably low, with employees potentially facing abrupt termination.

When compared to other major financial hubs like London, employment protection in the UAE is minimal. Employers in Dubai can legally dismiss staff for vague “legitimate reasons,” provided they offer compensation during the notice period. An industry professional described the environment as “a bit of a wild west,” reflecting the instability prevalent in the sector.

Concerns about employment practices were heightened by a social media post from headhunter Christie Doderer, who accused an unnamed hedge fund of questionable hiring practices. She noted that individuals relocating for employment might suddenly find themselves without adequate explanation or support.

Recent layoffs have occurred among several hedge funds in the region. For instance, Brevan Howard appointed Oualid Lahsini to oversee its Middle East operations in 2023, but he departed just a month later. His future plans remain unclear, though there are unconfirmed reports regarding his financial package from Brevan that may have provided temporary security.

One portfolio manager affected by a recent layoff in Dubai expressed feeling abandoned and highlighted the increased living costs as a major challenge. He stated, “The lifestyle is nice here, but you need a lot of money,” pointing to the rising rental prices in desirable locations such as Dubai Hills and Arabian Ranches. Complications arise as many decision-makers are located internationally, making job opportunities scarce in the region.

Furthermore, the current jobseeker visa in the UAE is limited to 120 days, necessitating an exit after this period. A portfolio manager advised potential movers to negotiate a two-year contract or, at the very least, request a golden visa valid for five to ten years. “It’s brutal here,” he concluded, reflecting on the harsh realities of life in the region, particularly as summer approaches.

In conclusion, while the UAE offers promising opportunities for hedge fund managers, the realities of job security and high living expenses are concerning. The precarious employment landscape has prompted many to reflect on their decisions to relocate. Industry professionals advise seeking long-term contracts or visas to mitigate the risks inherent in this volatile market, especially as summer intensifies.

Original Source: www.efinancialcareers.com