Middle East Venture Partners (MEVP) says it has received an asset management license from the Dubai Financial Services Authority (DFSA). The Dubai-based venture capital firm, which has $220 million in assets under management, says the license allows it to operate within the venture capital regulatory framework announced by the U.A.E. government last year, and that it's among the first venture capital firms to secure such a license from the DFSA.
The development reflects the changing regulatory attitude in the U.A.E. towards venture capital. Last year the U.A.E. government established basic reporting and operational principles for the industry, which followed a new legal system regulating venture capital funds created by the U.A.E.’s Securities and Commodities Authority in 2016. Last year the regulator for the Abu Dhabi Global Market also introduced a regulatory framework for venture capital.
MEVP’s license through the DFSA will cover risk management and reporting processes, as well as know-your-customer processes and anti-money laundering compliance. “We expect all other respectable VCs to follow in our footsteps and seek to be licensed; this would be in the best interests of the whole VC ecosystem,” said Walid Hanna, MEVP Founder and CEO, in a statement.
MEVP says operating with a DFSA license will allow it to solicit limited partner commitments from a wider pool of investors, especially from global institutional investors who can only transact with regulated venture asset managers. As venture capital is a riskier asset class, the move towards regulatory oversight will help protect the rights of investors and improve transparency, according to MEVP’s statement— adding that investors, entrepreneurs and other stakeholders in the industry should see regulation as a positive step.
“Companies like MEVP Capital are important in terms of further enhancing the comprehensive ecosystem in DIFC,” said Arif Amiri, Chief Executive Officer of DIFC Authority.
MEVP recently announced the launch of its third fund focused on the Middle East and North Africa, the Middle East Venture Fund III (MEVF III), which has a target size of $250 million. The fund will invest in series B and growth-stage technology companies in the region, including Turkey.