Franklin Templeton Investments, which manages $621 billion in assets, has bought 25% of Dubai's Algebra Capital and wants to grow its business in Arab markets, it said on Tuesday.
Franklin Templeton is a unit of Franklin Resources, the fourth-largest publicly traded U.S. fund manager.
Algebra expects the value of assets in the professionally managed funds in the Middle East and North Africa to triple over the next five years to more than $200 billion, it said in a statement announcing the deal.
The two companies declined to disclose the value of the deal, which gives Franklin Templeton two seats on Algebra's board.
"We see tremendous opportunity to grow our business in the Gulf and the greater Middle East-North Africa region," Greg Johnson, chief executive of Franklin Resources said in the statement.
The two companies will develop and distribute investment products together. Algebra and Franklin Templeton's Darby Overseas private equity arm will collaborate on investments in the Middle East and North Africa.
Algebra Capital is based in the Dubai International Financial Centre, a dollar-based, self regulating investment zone the Gulf emirate set up in 2004 to attract financial services providers to the world's biggest oil-exporting region.
Dubai is the part of the United Arab Emirates, one of the Gulf Arab countries trying to draw more foreign capital into its two stock markets, which lost more than 40% of their value last year.
The Dubai bourse will showcase its companies in November to investors in New York, where the smaller UAE stock market in Abu Dhabi made presentations earlier this year.