Hong Kong fund manager Quam Ltd has partnered with Abu Dhabi's Invest AD to establish a new Middle East equities fund aimed at Asian investors.

The Quam Middle East fund will primarily target Asian high net worth investors, with Quam acting as manager and Invest AD as sub-advisor, picking UAE-based stocks for Quam's clients in Hong Kong and Taiwan. The fund is looking to generate around $50 million for its initial investment.

Dubai recently experienced a massive hit to its economy, due both to the 2008 global financial crisis and a real estate-related debt problems in 2009. At present, companies listed on the Abu Dhabi Stock Exchange are trading at 9 to 10 times their price to earnings, against reported highs of 20. The region's financial health, however, does not appear to be a hindrance to Quam.

"We think the timing is right for investments in the region. When there's no bubble, it's absolutely the right time to buy," said Bernard Pouliot, the chairman of the Hong Kong firm.

"Investors in Asia are looking for diversification, especially now, when key Western and Asian markets have had a good run and look fully valued. There are many opportunities materializing in the Middle East across different sectors," he added.