|
When Dubai International Capital (DIC) launched in 2004, Sameer Al Ansari, its UK-trained head, outlined the fund's strategy.
He said that Asia would account for almost a third of investments made overseas by DIC, which today holds assets of around $12 billion across three divisions - private equity, public equity and emerging markets - with plans to double this over the next few years.
The deal with Sony, announced in November after nine months of negotiations, signalled a significant ramping up in this Asia strategy.
While undisclosed, the investment in the consumer electronics giant is estimated at between $500 million and $1 billion, the same amount thought to have been set aside by DIC's Global Strategic Equities Fund for other stakes made in companies such as HSBC and EADS. "For us, the criteria with Sony was a fantastic management and the fact that it is well placed in emerging markets, where we see the growth," says Anand Krishnan, DIC's chief operating officer.
Shifting geographical priorities are combining with the weak US dollar to persuade cash-rich Middle Eastern investors to refocus their portfolios on Asia, including established markets such as Japan, the giant Chinese market and emerging markets such as Vietnam.
From the Qatar Investment Authority to Abu Dhabi Investment Authority, the trend to invest in emerging markets - rather than the traditional purchasing of US treasury bills and London property - is spreading.
The Sony deal has moved DIC closer to its nominal target of 30 per cent of assets in Asia, with the remainder split between Europe and the Americas. "I don't want to be handcuffed by sector or geographical focus," Ansari says.
Other private-equity investments by the Dubai fund are in European companies with strong Asian revenue models, such as Mauser, the German industrial packager, which Ansari says is number one in India, with plants in China.
Much of DIC's $2 billion Asian exposure comes from a $700 million stake in ICICI Bank of India, which has provided the fund with access to the fast-growing Indian economy.
Receptacle
Ansari also hopes that the presence of Victor Chu - chief executive officer of First Eastern Investment Group - on the DIC board will strengthen the Dubai fund's position as a receptacle for further Asian deals.
DIC is only too aware of the challenges that face it and other Middle East investors as they try to shift assets eastwards. China and India pose particular problems for outside investors, but Ansari says DIC will find partners for co-investments to ease access into these markets.
Krishnan says DIC is closing in on a number of deals in India and China, while the firm's UK-based Travelodge hotels unit is seeking to open properties in India after expanding in Spain.
Observers see the tectonic plates of geopolitics moving in favour of firms such as Dubai International Capital.
Energy-hungry Asian countries are desperate to root themselves in the oil-rich Gulf, which will probably produce the world's last barrel of oil. Meanwhile, Gulf states have looked on askance at the rising tide of rhetoric from some Western nations regarding the apparent lack of transparency of sovereign wealth funds.
|
