MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Regulatory Trends
All Property Funds must 1. ensure they consist only of either real property,
property related assets (must be listed) and/or units in another property fund;
2. do not contain more than 40% cash and/or government and other public
securities 3. have the property assets independently valued annually 4.
appoint an investment committee consisting of three independent experts.
A Property Fund which is a Public Fund may: 1. only use either an Investment
Company or Investment Trust as the investment vehicle of the Fund; 2. must
ensure that it is listed and traded on an exchange in the DIFC or in a DFSA
recognised jurisdiction within 6 months of establishment 3. must ensure the
Fund constitution and Prospectus deal with the manner of issues and
redemptions of units and the circumstances of any private placements (if
applicable) 4. limit borrowing to 80% of Net Asset Value
Property Funds – Real Estate Investment Trusts (REITs)
REITS are a sub-set of Property Funds, which are designed for income
generation. A REIT must, in addition to being closed-ended:
o Use only Investment Company or Investment Trust as the Fund
vehicle;
o Be a Public Fund that is listed on an exchange in the DIFC or DFSA
recognised jurisdiction within 6 months of establishment
o Distribute a minimum of 80% of its audited annual net income to
unitholders;
o Not borrow beyond 70% of net asset value; and
o Invest in ‘property under development’ only up to 30% of the net
asset value.
In addition to the above specialist classes of Funds, the DFSA Funds regime
also has specific provisions dealing with Feeder Funds, Fund of Funds, and
Umbrella Funds.
Fund distribution (marketing of Funds)
The marketing of both Domestic and Foreign Funds are based on generally
accepted principles of disclosure through prospectus requirements. However,
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