Istithmar World, Dubai's Sovereign Wealth Fund, Is Halting Investments
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Istithmar World, the Dubai sovereign wealth fund, is halting investments as part of a restructuring effort, according to Bloomberg. Over the last decade, Istithmar World has spent more than $25 billion on investments ranging from a yacht marina, Vegas real estate, to luxury retailer Barneys New York.
Bloomberg said that Istithmar World may sell the fund or some of its assets. Last week, Ististhmar announced that its co-chief investment officers John Amato and Felix Herlihy would leave the firm. Additionally, the fund's manager, David Jackson's job is said to be under review.
Over the last few years, sovereign wealth funds have become large sources of capital for U.S. based companies, such as Citigroup (NYSE: C) and Morgan Stanley (NYSE: MS). A restructuring by Istithmar and its parent Dubai World demonstrates how the credit crisis has affected even oil rich countries that once made large investments in companies throughout the world.
Istithmar and Dubai World have had a tough time with their investments this year. Abu Dhabi, the wealthiest member of the UAE, provided a $10 billion bailout this year for Dubai as the emirate struggled to meet payments on $80 billion of debt used to finance real-estate projects.
Abdelaziz Al Mazam, head of marketing and public relations at Istithmar World, wrote to Bloomberg, "There are no plans to merge IW. IW is one of Dubai World’s key subsidiaries, actively managing a portfolio of investments worldwide, and will continue to be a key subsidiary into the future."
However, Rochdi Younsi, head of Middle East research at the Eurasia Group told Bloomberg, "Istithmar is in serious trouble. At Istithmar, there’s a feeling that jobs aren’t secure and it wouldn’t be a surprise if the firm just disappeared."
Bloomberg said that Istithmar World may sell the fund or some of its assets. Last week, Ististhmar announced that its co-chief investment officers John Amato and Felix Herlihy would leave the firm. Additionally, the fund's manager, David Jackson's job is said to be under review.
Over the last few years, sovereign wealth funds have become large sources of capital for U.S. based companies, such as Citigroup (NYSE: C) and Morgan Stanley (NYSE: MS). A restructuring by Istithmar and its parent Dubai World demonstrates how the credit crisis has affected even oil rich countries that once made large investments in companies throughout the world.
Istithmar and Dubai World have had a tough time with their investments this year. Abu Dhabi, the wealthiest member of the UAE, provided a $10 billion bailout this year for Dubai as the emirate struggled to meet payments on $80 billion of debt used to finance real-estate projects.
Abdelaziz Al Mazam, head of marketing and public relations at Istithmar World, wrote to Bloomberg, "There are no plans to merge IW. IW is one of Dubai World’s key subsidiaries, actively managing a portfolio of investments worldwide, and will continue to be a key subsidiary into the future."
However, Rochdi Younsi, head of Middle East research at the Eurasia Group told Bloomberg, "Istithmar is in serious trouble. At Istithmar, there’s a feeling that jobs aren’t secure and it wouldn’t be a surprise if the firm just disappeared."
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