By David Schlesinger and Dayan Candappa
Dubai: Dubai’s Istithmar is working on four deals to invest up to $2 billion and may still buy a controlling stake in a $4 billion European media firm, the state-owned investment agency’s CEO said on Monday 23 July.
Istithmar, which bought the luxury liner Queen Elizabeth 2 and a stake in Standard Chartered, first said it was looking for a European media purchase last year. The deal was now on “life support” but had not been completely ruled out, CEO David Jackson told Reuters.
Jackson confirmed a newspaper report that Istithmar was in talks to take a majority stake in an airline with African operations and to spend about $700 million with partners to buy a bank. He declined to give details of those or other deals.
Jackson told Reuters in March that Istithmar would decide within a month on whether to buy a controlling stake in a $4 billion Western European media company. He declined to name the company but said at the time that if the deal could not be concluded quickly it would be scrapped.
“That is still, believe it or not, on life support,” he said. “It’s not dead, but it’s a little bit more of what I would call more wishful thinking now than it was before. But it’s not technically dead.”
Istithmar is on track to invest $3 billion this year, Jackson said.
“At any given moment we have four things where the equity cheque for us would be north of $150 million and south of $500 million. There’s probably four things like that ongoing.”
Istithmar is in talks to spend at least $200 million on a majority stake in an airline with African operations and about $700 million with partners to buy a bank, the Gulf News reported on 5 July, citing Istithmar’s vice-chairman Khalid al-Kamda.
“Everything that we wanted to say about that, Khalid said,” Jackson said of the report.
Gulf Arab agencies such as Istithmar are scouring the globe for assets on behalf of governments looking to invest wealth from a tripling of oil prices in the past five years.
Gulf investors have already spent around $40 billion on foreign acquisitions in 2007, more than in any previous year.
Istithmar has made about $4 billion worth of investments in the past four years, including buying 2.7% of Standard Chartered for $1 billion last year.
The agency’s global property portfolio was worth about $8 billion, Richard Johnson, managing director of Istithmar Real Estate said in June.
Istithmar agreed to buy luxury retailer Barneys New York for $825 million before Japan’s Fast Retailing put in a $900 million bid. Jackson said he was waiting for word on that deal.
Istithmar announced on 24 June it had bought 3% of European hedge fund company GLG Partners, which has $20 billion in assets under management. The next day GLG announced plans for a US stock market listing to help it expand.
“The investment in GLG was to get smarter about what’s happening in the hedge fund world,” said Jackson.
Exploring venture capital and hedge fund investments were among new initiatives Istithmar will consider for next year, he said.
Istithmar invests money from the government of Dubai, a member of the oil-exporting UAE federation, and commercial hub of the Gulf Arab region. It could decide to raise capital from other investors next year, Jackson said.
“Capital and liquidity isn’t our biggest problem,” he said.
“If we took money from other places we would lose some flexibility so we are weighing that.”