Middle East and Saudi Arabia
03 February 2026
As hedge funds flock to the Middle East and Saudi Arabia moves to open its capital markets, industry participants anticipate exciting developments on the horizon as they explore the prime brokerage landscape and words of wisdom for future investors. Carmella Haswell reports
Image: stock.adobe.com/hasan
Markets within the Middle East continue to open up, providing key incentives for potential foreign investors who look to a region with a promising future. The prime brokerage landscape here has proven to be an intriguing one as hedge funds continue to invest 鈥� evident through recent activity within the ADGM and the Dubai International Financial Centre (DIFC).
Over the past two years, the ADGM has experienced a marked increase in hedge funds and the asset management sector more broadly, reflecting the growing appeal of Abu Dhabi as a global asset management hub. Assets under management (AUM) in ADGM surged by 48 per cent year-on-year in the third quarter of 2025. For the same period, the number of funds managed out of ADGM reached 220, supported by 161 asset and fund managers.
This upward trend has been visible in the past few years, according to the international financial centre, with the annual numbers for 2024 showcasing growth of 245 per cent in AUMs and significant global asset management entities establishing operations within ADGM鈥檚 jurisdiction.
On the other hand, the DIFC registered its 100th hedge fund in December 鈥� a number that has doubled since the beginning of 2024. According to the global financial centre, 81 of these hedge funds are billion-dollar AUM managers. The new arrivals include Baron Capital Management, BlueCrest Capital, Naya Capital Management, and North Rock Capital.
The ability to trade Asian, European, and American markets 鈥� as well as to tap the region鈥檚 talent pool and raise capital 鈥� appear as key incentives for managers to join Dubai鈥檚 global financial centre.
For Tony Hallside, CEO at STP Partners, the increase of hedge fund registrations within DIFC reflects a deliberate recalibration in global capital allocation and a growing recognition of the Gulf as a strategically-positioned financial centre. He says the region鈥檚 commitment to investor protection and economic diversification has helped to create an increasingly attractive environment for sophisticated asset managers.
A maturing market
The Middle East has captured the interests of the financial industry in more ways than one. The use of regulatory reforms and stability, access to emerging markets, as well as favourable tax regimes and workforce growth, are just a few key elements that have played their part.
In addition, high quality of life and strategic time-zone positioning 鈥� in particular, the convenient time zone alignment between Asia and Europe 鈥� have repositioned the region from a 鈥減eripheral trading centre鈥� into a 鈥渃redible global hedge fund hub鈥�, notes Mazen Najjar, vice president of Prime Services sales at Marex.
In terms of the important alignment between Asia and Europe, Jalal Faruki, head of securities at SNB Capital, indicates that while multiple global prime brokers provide access to the Middle East鈥檚 capital markets, they largely do so through trading hubs in Europe or Asia. This makes raising capital from local investors in the Middle East slightly different, because the fund structures and domiciles will likely be outside the regional regulatory frameworks.
Continuing to explore the benefits of the region, Najjar notes that access to deep regional capital is a key differentiator, with Middle Eastern sovereign wealth funds deploying over US$130 billion globally in 2024, alongside an increasingly sophisticated family-office base. 鈥淲hat began as an early-mover opportunity has become a self-reinforcing trend: as more global hedge funds establish a presence in DIFC and ADGM, others are following while some are choosing to launch in the UAE 鈥� drawn by investor proximity, talent depth, and ecosystem validation,鈥� says Najjar.
Hallside indicates that the region also offers access to substantial pools of institutional and sovereign capital. Further, managers are responding to client demand in terms of proximity to capital sources and to emerging themes such as energy transition, digital assets, and infrastructure 鈥� all of which are highly relevant to Gulf economies. He adds: 鈥淭he shift is not simply quantitative. It is indicative of a qualitative maturation of the region鈥檚 financial ecosystem.鈥�
Adding to this endless list of opportunities and benefits, Faruki says the development and growth of regional capital markets presents opportunities to implement global strategies with less competition. In certain segments such as high-frequency trading and quantitative trading, he believes the opportunities in Middle Eastern markets are relatively untapped.
Boots on the ground
Acting as a stark reminder of a growing and important market, the total global hedge fund industry capital surged above a historic US$5 trillion milestone for the first time, with capital jumping for the ninth consecutive quarter in Q4 of 2025, ending the year at a record US$5.15 trillion, as reported in the latest Hedge Fund Research (HFR) Global Hedge Fund Industry Report.
Core to its function, prime brokers provide financing and related services to hedge funds, including operational support, securities lending, risk management services, and capital introductions. Marked as an important part of the financial ecosystem by Faruki, the nature and operating model of prime brokerage services have shifted significantly over the past 10 to 20 years.
Previously, United Arab Emirates (UAE)-based managers had limited on-the-ground prime brokerage support and were often forced to rely on London, which Najjar notes was an inefficient model in a highly relationship-driven market. 鈥淭he increasing local presence of prime brokers is changing this dynamic, reinforcing liquidity growth, infrastructure investment, and institutional market maturity.鈥�
Looking at the landscape in 2026, Faruki says the majority of global prime brokerage providers are running 鈥榮ynthetic鈥� prime brokerage services which rely on International Swaps and Derivatives Association (ISDA)-based swap agreements.
However, the synthetic prime brokerage model does not fit within many of the regulatory structures of regional capital markets, he explains, which largely require assets to be owned in an 鈥業nvestor ID鈥� and identified account at the local central securities depository (CSD) level in the name of the beneficial owner. Faruki notes that omnibus account structures and ISDA swaps are not normally available from local financial institutions to the local investors in such markets.
In additon, prime brokerage services were previously based on shares held in an omnibus account against acceptable collateral and margins, allocated to various clients on the short and long side with leverage provided at relatively conservative loan-to-value ratios of 2:1 or 4:1 for equity and fixed income assets. According to Faruki, leverage ratios on the positions in these ISDA-based swap agreements can move much higher into the double-digit loan-to-value ratios and include a greater variety of asset classes such as FX, interest rate swaps, cryptocurrencies, and all types of over-the-counter (OTC) derivatives and structured products.
鈥淲hile the above does not reduce the demand for securities borrowing and lending, as regional capital markets develop and evolve, we expect to see more development in terms of these types of institutional products,鈥� Faruki predicts.
A number of market participants in the region emphasise the importance of prime brokerage in the region, as well as its continued development. Notably, such services are regarded as essential for the evolution of capital markets across the region. With hedge funds flocking to the Middle East, participants believe the move will support on-shore liquidity, growing securities financing and derivatives activity, and improving access to local instruments.
Furthermore, it seems to have created a fertile environment for capital formation, as noted by Hallside. He continues: 鈥淭he opportunity for prime brokers lies in enabling this transition by providing not just execution and clearing, but also tailored capital introduction, risk analytics, and operational efficiency. As market depth and diversity grow, prime services will become a critical enabler of performance, governance, and connectivity across investor types.鈥�
Having boots on the ground has allowed companies such as Marex to engage directly with managers, regulators, and local liquidity providers, enabling faster decision-making, stronger risk alignment, and more tailored financing solutions. Meanwhile, firms such as IG Prime have used their local presence to connect hedge funds and grow the wider ecosystem in the region, while providing access to trading and financing solutions via their platform.
With prime brokerage in the Middle East being relatively new, it is only natural to explore how this service differs from other regions.
From the perspective of Richard Fenton, head of prime sales Middle East at IG Prime, there is a large capital introduction opportunity in this region from varying sources 鈥� from sovereign money to private capital and family offices. He says the latter is a relatively new form of allocation into alternatives in this region.
Capital raising appears as a key differential for the region, especially when compared to markets such as the US or Europe. Najjar explains that managers in the Middle East tend to operate much closer to local allocators, sovereign wealth funds, family offices, and ultra-high-net-worth investors, where decision-making is highly relationship-driven and often less intermediated.
Prime brokers play a more consultative role, going beyond core financing and execution to help managers navigate allocator dynamics, provide candid capital-introduction feedback, and distinguish between investors with genuine dry powder and those at an earlier exploratory stage.
For those less familiar, Najjar highlights that face-to-face engagement and ongoing dialogue are more critical than other regions, allowing managers to refine their approach, understand next steps, and build conviction over time. 鈥淚n this environment, depth of relationships and local presence can have a material impact on fundraising outcomes, particularly for emerging and first-time managers.鈥�
Providing advice to those looking to ascend in the region, Hallside notes that prime brokers operating in the region must integrate investor insight, relationship access, and capital advisory into their service model. He states it is not enough to provide infrastructure and financing.
He continues: 鈥淪uccess depends on being able to navigate local nuances and align international managers with regional allocators who are increasingly sophisticated but retain a strong preference for trust-based engagement.鈥�
Knowing the players, and the game
For market participants looking to integrate within the Middle Eastern markets, firms with boots firmly on the ground in areas such as Dubai, Saudi Arabia, and Abu Dhabi, present words of wisdom.
鈥淭ake time to understand which jurisdiction fits best for the size of launch and strategy, including opportunity to cap raise. By leveraging prime consulting teams you will be able to select the right fit for the launch and structural set up,鈥� notes Fenton.
IG Prime in Dubai offers a cross asset trading and financing solution in one, with cross margining capabilities. This is traded in a low touch, low-cost tech focused solution with large balance sheet capabilities and no minimum AUM commitments.
鈥淪etting up in the UAE offers enormous opportunity, but success requires strategic planning and cultural fluency. Recognising cultural norms is critical: business in the Middle East is highly relationship-driven, and understanding local etiquette and decision-making dynamics can materially influence engagement and fundraising outcomes,鈥� states Najjar.
While working with experienced local service providers can also be a significant advantage, Najjar adds that understanding the jurisdictional landscape is equally important. Notably, he explains that the choice between DIFC and ADGM has implications for licensing pathways, regulatory oversight, reporting obligations, and investor perception.
Marex has a fully-integrated team on the ground, covering sales, outsourced trading, and capital introduction. The firm says it can support both cash and synthetic prime brokerage. Marex has regulated offices in both Dubai and Abu Dhabi, with over 120 people across the two locations, enabling the firm to support clients locally while connecting them to global markets.
鈥淐redibility must be prioritised from the outset, sovereign wealth funds and family offices expect robust governance, transparency, and scalable operating models. Building relationships early is essential, and trust is most effectively developed through consistent, face-to-face engagement supported by a permanent local presence,鈥� Najjar comments.
From an STP Partners perspective, Hallside says managers who come in with alignment to regional goals, whether in sustainability, digital transformation, or local economic integration, will find a receptive audience. With a region-first, client-led, and outcomes-driven approach, STP Partners says it provides integrated solutions that reflect the needs of managers navigating both global mandates and regional opportunities.
With a keen interest in the Kingdom of Saudi Arabia, Faruki says the largest benefits for future hedge funds are located here and in the UAE. As the largest capital market in the MENA region, those looking to invest can benefit from both public and private funds, which allows fund managers to open their fund to all investors or, as a private fund, selectively accept only qualified and specific investors.
Faruki explores: 鈥淎nother important benefit of funds being domiciled in Saudi Arabia is the ease of raising money from local investors and family offices, as the volume and size of these institutions are far larger than in other regional markets.
鈥淲hile the UAE has attracted the greatest number of foreign fund managers, the activity of those funds is largely conducted in global assets and markets and is not specifically related to a large portion of the UAE markets in the Dubai Financial Market and Abu Dhabi 网爆吃瓜 Exchange.
鈥淭herefore, fund managers seeking to benefit from institutional and global capital raising, the availability of local service providers, and large pools of talent existing on the ground, the UAE is an attractive opportunity both in the DIFC and the ADGM financial centres.鈥�
SNB Capital鈥檚 prime brokerage product was built and designed to support local institutional investors and fund managers in Saudi Arabia first and foremost, offering a custody and brokerage platform covering the Saudi Exchange with co-located trading access and a significant security borrowing and lending desk.
While challenges remain for hedge funds looking to engage with the Middle East 鈥� such as navigating nuanced regulatory frameworks, engaging with a distinct allocator base, and cross-border fund structuring considerations 鈥� with the right local guidance and a tailored approach, these hurdles can become manageable.
A prosperous future
A land full of promises, the Middle East appears to welcome hedge funds with open arms. As market participants continue to engage with the region, they seem hopeful for its future development.
鈥淧rime will become more prominent in the wider GCC market and we are seeing this now with increased liquidity in Gulf markets and access to financing and prime solutions. We anticipate these countries contributing to alternative funds鈥� growth in the years to come,鈥� Fenton predicts.
Also anticipating further growth, Hallside expects the prime brokerage landscape to evolve both in depth and complexity, calling the opening of Saudi Arabia鈥檚 markets to a broader base of foreign investors an inflection point.
At the beginning of 2026, the Kingdom鈥檚 Capital Market Authority (CMA) confirmed the opening of Saudi Arabia鈥檚 capital market to all categories of foreign investors. As a result, foreign investors will be able to invest directly, following approval of the regulatory framework allowing non-resident foreign investors to invest directly in the Main Market.
Hallside believes the opening of this particular market will accelerate demand for multi-jurisdictional prime services, enhance the need for localised structuring expertise, and increase the focus on cross-market compliance and transparency.
鈥淩ather than a replication of Western models, the region will develop a hybrid prime brokerage framework. This will combine international best practices with local adaptability. Over the next 12 months, we anticipate a marked increase in demand for fund onboarding support, synthetic financing, and integrated capital introduction capabilities,鈥� he explores.
Continuing with the future assessment of Saudi Arabia, Najjar suggests that it will not be a market defined by traditional big-bank playbooks. Instead, he says success will favour nimble, solutions-led prime brokers that can move quickly, price and margin dynamically, and build client-specific structures around financing and market access.
Najjar adds: 鈥淪audi Arabia鈥檚 market opening is expected to unlock meaningful foreign inflows 鈥� particularly into equities 鈥� driving demand for cross-GCC execution, clearing, financing, and securities lending. As MENA markets deepen and converge, prime brokerage will move decisively away from siloed, country-by-country models toward integrated, regional solutions.鈥�
Reflecting on the work in Saudi Arabia to open the market to more foreign investors, Faruki notes that there is also a significant potential opportunity for foreign investor flows from mid-size and smaller institutions, family offices, and asset managers to enter the market now, based on the new regulations. He believes that the ease of market access has significantly shifted, which will drive investors to directly enter the market through local providers such as SNB Capital instead of utilising synthetic structures or foreign fund or ETF products they may have previously used.
He concludes: 鈥淭his evolution in the local capital markets is also expected to add a new layer of liquidity to the market, which, combined with market structure reforms and products such as exchange-listed derivatives and a growing securities borrowing and lending market, position Saudi Arabia for an exciting 12 months ahead.鈥�
Over the past two years, the ADGM has experienced a marked increase in hedge funds and the asset management sector more broadly, reflecting the growing appeal of Abu Dhabi as a global asset management hub. Assets under management (AUM) in ADGM surged by 48 per cent year-on-year in the third quarter of 2025. For the same period, the number of funds managed out of ADGM reached 220, supported by 161 asset and fund managers.
This upward trend has been visible in the past few years, according to the international financial centre, with the annual numbers for 2024 showcasing growth of 245 per cent in AUMs and significant global asset management entities establishing operations within ADGM鈥檚 jurisdiction.
On the other hand, the DIFC registered its 100th hedge fund in December 鈥� a number that has doubled since the beginning of 2024. According to the global financial centre, 81 of these hedge funds are billion-dollar AUM managers. The new arrivals include Baron Capital Management, BlueCrest Capital, Naya Capital Management, and North Rock Capital.
The ability to trade Asian, European, and American markets 鈥� as well as to tap the region鈥檚 talent pool and raise capital 鈥� appear as key incentives for managers to join Dubai鈥檚 global financial centre.
For Tony Hallside, CEO at STP Partners, the increase of hedge fund registrations within DIFC reflects a deliberate recalibration in global capital allocation and a growing recognition of the Gulf as a strategically-positioned financial centre. He says the region鈥檚 commitment to investor protection and economic diversification has helped to create an increasingly attractive environment for sophisticated asset managers.
A maturing market
The Middle East has captured the interests of the financial industry in more ways than one. The use of regulatory reforms and stability, access to emerging markets, as well as favourable tax regimes and workforce growth, are just a few key elements that have played their part.
In addition, high quality of life and strategic time-zone positioning 鈥� in particular, the convenient time zone alignment between Asia and Europe 鈥� have repositioned the region from a 鈥減eripheral trading centre鈥� into a 鈥渃redible global hedge fund hub鈥�, notes Mazen Najjar, vice president of Prime Services sales at Marex.
In terms of the important alignment between Asia and Europe, Jalal Faruki, head of securities at SNB Capital, indicates that while multiple global prime brokers provide access to the Middle East鈥檚 capital markets, they largely do so through trading hubs in Europe or Asia. This makes raising capital from local investors in the Middle East slightly different, because the fund structures and domiciles will likely be outside the regional regulatory frameworks.
Continuing to explore the benefits of the region, Najjar notes that access to deep regional capital is a key differentiator, with Middle Eastern sovereign wealth funds deploying over US$130 billion globally in 2024, alongside an increasingly sophisticated family-office base. 鈥淲hat began as an early-mover opportunity has become a self-reinforcing trend: as more global hedge funds establish a presence in DIFC and ADGM, others are following while some are choosing to launch in the UAE 鈥� drawn by investor proximity, talent depth, and ecosystem validation,鈥� says Najjar.
Hallside indicates that the region also offers access to substantial pools of institutional and sovereign capital. Further, managers are responding to client demand in terms of proximity to capital sources and to emerging themes such as energy transition, digital assets, and infrastructure 鈥� all of which are highly relevant to Gulf economies. He adds: 鈥淭he shift is not simply quantitative. It is indicative of a qualitative maturation of the region鈥檚 financial ecosystem.鈥�
Adding to this endless list of opportunities and benefits, Faruki says the development and growth of regional capital markets presents opportunities to implement global strategies with less competition. In certain segments such as high-frequency trading and quantitative trading, he believes the opportunities in Middle Eastern markets are relatively untapped.
Boots on the ground
Acting as a stark reminder of a growing and important market, the total global hedge fund industry capital surged above a historic US$5 trillion milestone for the first time, with capital jumping for the ninth consecutive quarter in Q4 of 2025, ending the year at a record US$5.15 trillion, as reported in the latest Hedge Fund Research (HFR) Global Hedge Fund Industry Report.
Core to its function, prime brokers provide financing and related services to hedge funds, including operational support, securities lending, risk management services, and capital introductions. Marked as an important part of the financial ecosystem by Faruki, the nature and operating model of prime brokerage services have shifted significantly over the past 10 to 20 years.
Previously, United Arab Emirates (UAE)-based managers had limited on-the-ground prime brokerage support and were often forced to rely on London, which Najjar notes was an inefficient model in a highly relationship-driven market. 鈥淭he increasing local presence of prime brokers is changing this dynamic, reinforcing liquidity growth, infrastructure investment, and institutional market maturity.鈥�
Looking at the landscape in 2026, Faruki says the majority of global prime brokerage providers are running 鈥榮ynthetic鈥� prime brokerage services which rely on International Swaps and Derivatives Association (ISDA)-based swap agreements.
However, the synthetic prime brokerage model does not fit within many of the regulatory structures of regional capital markets, he explains, which largely require assets to be owned in an 鈥業nvestor ID鈥� and identified account at the local central securities depository (CSD) level in the name of the beneficial owner. Faruki notes that omnibus account structures and ISDA swaps are not normally available from local financial institutions to the local investors in such markets.
In additon, prime brokerage services were previously based on shares held in an omnibus account against acceptable collateral and margins, allocated to various clients on the short and long side with leverage provided at relatively conservative loan-to-value ratios of 2:1 or 4:1 for equity and fixed income assets. According to Faruki, leverage ratios on the positions in these ISDA-based swap agreements can move much higher into the double-digit loan-to-value ratios and include a greater variety of asset classes such as FX, interest rate swaps, cryptocurrencies, and all types of over-the-counter (OTC) derivatives and structured products.
鈥淲hile the above does not reduce the demand for securities borrowing and lending, as regional capital markets develop and evolve, we expect to see more development in terms of these types of institutional products,鈥� Faruki predicts.
A number of market participants in the region emphasise the importance of prime brokerage in the region, as well as its continued development. Notably, such services are regarded as essential for the evolution of capital markets across the region. With hedge funds flocking to the Middle East, participants believe the move will support on-shore liquidity, growing securities financing and derivatives activity, and improving access to local instruments.
Furthermore, it seems to have created a fertile environment for capital formation, as noted by Hallside. He continues: 鈥淭he opportunity for prime brokers lies in enabling this transition by providing not just execution and clearing, but also tailored capital introduction, risk analytics, and operational efficiency. As market depth and diversity grow, prime services will become a critical enabler of performance, governance, and connectivity across investor types.鈥�
Having boots on the ground has allowed companies such as Marex to engage directly with managers, regulators, and local liquidity providers, enabling faster decision-making, stronger risk alignment, and more tailored financing solutions. Meanwhile, firms such as IG Prime have used their local presence to connect hedge funds and grow the wider ecosystem in the region, while providing access to trading and financing solutions via their platform.
With prime brokerage in the Middle East being relatively new, it is only natural to explore how this service differs from other regions.
From the perspective of Richard Fenton, head of prime sales Middle East at IG Prime, there is a large capital introduction opportunity in this region from varying sources 鈥� from sovereign money to private capital and family offices. He says the latter is a relatively new form of allocation into alternatives in this region.
Capital raising appears as a key differential for the region, especially when compared to markets such as the US or Europe. Najjar explains that managers in the Middle East tend to operate much closer to local allocators, sovereign wealth funds, family offices, and ultra-high-net-worth investors, where decision-making is highly relationship-driven and often less intermediated.
Prime brokers play a more consultative role, going beyond core financing and execution to help managers navigate allocator dynamics, provide candid capital-introduction feedback, and distinguish between investors with genuine dry powder and those at an earlier exploratory stage.
For those less familiar, Najjar highlights that face-to-face engagement and ongoing dialogue are more critical than other regions, allowing managers to refine their approach, understand next steps, and build conviction over time. 鈥淚n this environment, depth of relationships and local presence can have a material impact on fundraising outcomes, particularly for emerging and first-time managers.鈥�
Providing advice to those looking to ascend in the region, Hallside notes that prime brokers operating in the region must integrate investor insight, relationship access, and capital advisory into their service model. He states it is not enough to provide infrastructure and financing.
He continues: 鈥淪uccess depends on being able to navigate local nuances and align international managers with regional allocators who are increasingly sophisticated but retain a strong preference for trust-based engagement.鈥�
Knowing the players, and the game
For market participants looking to integrate within the Middle Eastern markets, firms with boots firmly on the ground in areas such as Dubai, Saudi Arabia, and Abu Dhabi, present words of wisdom.
鈥淭ake time to understand which jurisdiction fits best for the size of launch and strategy, including opportunity to cap raise. By leveraging prime consulting teams you will be able to select the right fit for the launch and structural set up,鈥� notes Fenton.
IG Prime in Dubai offers a cross asset trading and financing solution in one, with cross margining capabilities. This is traded in a low touch, low-cost tech focused solution with large balance sheet capabilities and no minimum AUM commitments.
鈥淪etting up in the UAE offers enormous opportunity, but success requires strategic planning and cultural fluency. Recognising cultural norms is critical: business in the Middle East is highly relationship-driven, and understanding local etiquette and decision-making dynamics can materially influence engagement and fundraising outcomes,鈥� states Najjar.
While working with experienced local service providers can also be a significant advantage, Najjar adds that understanding the jurisdictional landscape is equally important. Notably, he explains that the choice between DIFC and ADGM has implications for licensing pathways, regulatory oversight, reporting obligations, and investor perception.
Marex has a fully-integrated team on the ground, covering sales, outsourced trading, and capital introduction. The firm says it can support both cash and synthetic prime brokerage. Marex has regulated offices in both Dubai and Abu Dhabi, with over 120 people across the two locations, enabling the firm to support clients locally while connecting them to global markets.
鈥淐redibility must be prioritised from the outset, sovereign wealth funds and family offices expect robust governance, transparency, and scalable operating models. Building relationships early is essential, and trust is most effectively developed through consistent, face-to-face engagement supported by a permanent local presence,鈥� Najjar comments.
From an STP Partners perspective, Hallside says managers who come in with alignment to regional goals, whether in sustainability, digital transformation, or local economic integration, will find a receptive audience. With a region-first, client-led, and outcomes-driven approach, STP Partners says it provides integrated solutions that reflect the needs of managers navigating both global mandates and regional opportunities.
With a keen interest in the Kingdom of Saudi Arabia, Faruki says the largest benefits for future hedge funds are located here and in the UAE. As the largest capital market in the MENA region, those looking to invest can benefit from both public and private funds, which allows fund managers to open their fund to all investors or, as a private fund, selectively accept only qualified and specific investors.
Faruki explores: 鈥淎nother important benefit of funds being domiciled in Saudi Arabia is the ease of raising money from local investors and family offices, as the volume and size of these institutions are far larger than in other regional markets.
鈥淲hile the UAE has attracted the greatest number of foreign fund managers, the activity of those funds is largely conducted in global assets and markets and is not specifically related to a large portion of the UAE markets in the Dubai Financial Market and Abu Dhabi 网爆吃瓜 Exchange.
鈥淭herefore, fund managers seeking to benefit from institutional and global capital raising, the availability of local service providers, and large pools of talent existing on the ground, the UAE is an attractive opportunity both in the DIFC and the ADGM financial centres.鈥�
SNB Capital鈥檚 prime brokerage product was built and designed to support local institutional investors and fund managers in Saudi Arabia first and foremost, offering a custody and brokerage platform covering the Saudi Exchange with co-located trading access and a significant security borrowing and lending desk.
While challenges remain for hedge funds looking to engage with the Middle East 鈥� such as navigating nuanced regulatory frameworks, engaging with a distinct allocator base, and cross-border fund structuring considerations 鈥� with the right local guidance and a tailored approach, these hurdles can become manageable.
A prosperous future
A land full of promises, the Middle East appears to welcome hedge funds with open arms. As market participants continue to engage with the region, they seem hopeful for its future development.
鈥淧rime will become more prominent in the wider GCC market and we are seeing this now with increased liquidity in Gulf markets and access to financing and prime solutions. We anticipate these countries contributing to alternative funds鈥� growth in the years to come,鈥� Fenton predicts.
Also anticipating further growth, Hallside expects the prime brokerage landscape to evolve both in depth and complexity, calling the opening of Saudi Arabia鈥檚 markets to a broader base of foreign investors an inflection point.
At the beginning of 2026, the Kingdom鈥檚 Capital Market Authority (CMA) confirmed the opening of Saudi Arabia鈥檚 capital market to all categories of foreign investors. As a result, foreign investors will be able to invest directly, following approval of the regulatory framework allowing non-resident foreign investors to invest directly in the Main Market.
Hallside believes the opening of this particular market will accelerate demand for multi-jurisdictional prime services, enhance the need for localised structuring expertise, and increase the focus on cross-market compliance and transparency.
鈥淩ather than a replication of Western models, the region will develop a hybrid prime brokerage framework. This will combine international best practices with local adaptability. Over the next 12 months, we anticipate a marked increase in demand for fund onboarding support, synthetic financing, and integrated capital introduction capabilities,鈥� he explores.
Continuing with the future assessment of Saudi Arabia, Najjar suggests that it will not be a market defined by traditional big-bank playbooks. Instead, he says success will favour nimble, solutions-led prime brokers that can move quickly, price and margin dynamically, and build client-specific structures around financing and market access.
Najjar adds: 鈥淪audi Arabia鈥檚 market opening is expected to unlock meaningful foreign inflows 鈥� particularly into equities 鈥� driving demand for cross-GCC execution, clearing, financing, and securities lending. As MENA markets deepen and converge, prime brokerage will move decisively away from siloed, country-by-country models toward integrated, regional solutions.鈥�
Reflecting on the work in Saudi Arabia to open the market to more foreign investors, Faruki notes that there is also a significant potential opportunity for foreign investor flows from mid-size and smaller institutions, family offices, and asset managers to enter the market now, based on the new regulations. He believes that the ease of market access has significantly shifted, which will drive investors to directly enter the market through local providers such as SNB Capital instead of utilising synthetic structures or foreign fund or ETF products they may have previously used.
He concludes: 鈥淭his evolution in the local capital markets is also expected to add a new layer of liquidity to the market, which, combined with market structure reforms and products such as exchange-listed derivatives and a growing securities borrowing and lending market, position Saudi Arabia for an exciting 12 months ahead.鈥�
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