Two years ago, Magellan Capital was a three-man team sitting on the proceeds of a USD 1.1 bn sale. Today it has launched the UAE’s largest locally-debuted hedge fund — and that’s just one side of the business.
Magellan Capital Chief Investment Officer Ahmed Omar spent two years restructuring Zakher Marine International, an offshore services business, before it was sold to Adnoc Logistics & Services for USD 1.1 bn in 2022. The proceeds landed in a holding company, which spun out Magellan Capital in June 2024. The firm started as a family office, but evolved into a multi-faceted business that aims to solve problems that it itself went through a few years back.
Sitting on bns of AED in proceeds, Magellan found itself a large family office by Gulf standards — well-banked, courted by private banks, and offered the full menu of structured products. But the options on the table for the family office weren’t very attractive. “The products [banks] were pitching us were stacked with fees but with a risk-reward that wasn’t really lucrative enough,” he tells us.
The best-performing strategy the small team had found was the simplest one: pick companies they believed in and buy the stock directly. Long-only, execution-only, no intermediary. So they decided to build that into a proper fund — and then hire the team to do it properly.
The other problem the hedge fund is trying to fix: The best-performing hedge funds in the world are largely closed to new investors, and what the private banks can actually offer is the leftover allocation — a slot that opened up because someone else got rotated out, Omar explains. “You end up getting allocated to an up-and-coming,” he says. “It could be a fantastic business — or they blow up in six months.”
The result is a USD 975 mn multi-strategy hedge fund that launched with a USD 700 mn soft close in August 2024 and scaled up earlier this year — one of the largest hedge fund debuts the Gulf has seen. The fund runs three strategies it believes are decorrelated from each other: long-only equities for the long-term upside, long-short to reduce drawdown volatility when markets sell off, and emerging market credit where Omar sees an edge the fund’s geography gives it. “We live here, we’re based here, and we can recognize dislocation when we see it, probably more than international investors,” he explains. Meanwhile, US high-yield spreads, by contrast, are at their tightest in 15 years — not where Magellan wants to be playing.
The Magellan Asset-backed Opportunities Fund is its latest bet — and it targets another gap facing firms in the region. Launched this month with USD 50 mn in seed capital and a target of USD 250 mn AUM, it comes at a time when the private sector, and in particular SMEs — already an underserved segment — are facing an environment of tightened liquidity. Banks, he tells us, tend to seize up and step back in times like these, which is where investors like Magellan can step in. “Good businesses are still going to be good businesses,” even if the environment is not a supportive one for a period of a few months, he says.
REMEMBER- We reported last week that banks are likely to tighten their purses this year, with lending growth expected to come in at 8-10%, slightly slower than the double-digit expansion the sector has been experiencing over the past few years, as they review their risk appetite.
It’s a tried and true strategy: The model was proved, at a smaller scale, through a December 2024 investment with Beehive, one of the GCC’s leading SME lending platforms, Omar tells us. The data from that investment, he says, was “very strong, very promising” — enough to build a fund around.
The advisory business is the third leg. Its thesis is, once again, there is a gap where mid-market firms’ advisors should be, Omar explains. Bulge bracket banks won’t do small transactions, simply because the economics don’t work for them. “The amount of work they do in a USD 1 bn transaction is the same as in a USD 20 bn one,” Omar said.
That leaves many businesses with advisory needs with very limited options, and many end up hiring a Big Four accounting firm, which is not the same thing, Omar tells us. Magellan is positioning itself to fill that gap — and Omar tells us the goal is to bring international-caliber execution at a fraction of the cost. The firm has worked on restructuring deals in the EPC and offshore oilfield services sectors, and recently advised offshore marine services firm HEA Energy on a USD 550 mn bond.
The firm is now 40 people — 25 investment professionals and around 15 in support and back office — up from three at inception. Hiring, Omar says, is the hardest bottleneck: one bad hire in a small team creates outsized damage, and good talent is scarce. Dubai’s quality of life and zero-tax environment have helped; whether the regional conflict has changed that calculus is, as Omar puts it, yet to be tested.
REMEMBER- In May 2025, a former Magellan portfolio manager filed complaints with the DFSA and the UK Financial Conduct Authority, alleging that losses had been concealed and that staff had been blocked from raising risk concerns. The regulatory process concluded in October 2025, with Magellan saying the DFSA found no evidence of regulatory breaches.