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Dubai fund hires big hitters

By Martin Arnold in London

Published: November 29 2007 17:08 | Last updated: November 29 2007 17:08

Dubai International Capital on Thursday appointed the former heads of Sony, BMW and the boss of GlaxoSmithKline to the advisory board of its global strategic equities fund, which buys stakes in big listed companies.

The calibre of the appointments underlines the far-reaching ambitions of the Gulf investment fund, which is owned by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum. The move also reflects DIC’s desire to gain legitimacy in global markets.

DIC said Nobuyuki Idei, the former chief executive of Sony, would join the advisory board of its global strategic equities fund, just three days after it unveiled a “significant investment” in the Japanese consumer electronics maker.

Helmut Panke, former chief executive of BMW, the German carmaker, will also join with immediate effect, while Jean-Pierre Garnier will join when he steps down as head of GlaxoSmithKline, the UK pharmaceutical group, in May 2008.

In recent years, the likes of Mr Garnier were likely to join private equity groups, such as Carlyle, once called the “ex-presidents club” for its array of top advisers. Now some of these figures are joining fast-growing Asian and Gulf investors, like DIC.

“These are three very substantial appointments for GESF which reflect the global ambitions of the fund,” said Sameer Al Ansari, chief executive of DIC. He said the new appointments would “provide the fund with valuable insights”.

DIC’s global strategic equities fund has $2bn under management and earlier this year it made investments of about $500m-$1bn in HSBC, the world’s fourth-largest bank, and EADS, the Franco-German aerospace group that owns Airbus.

Mr Al Ansari describes the global strategic equities fund as “an exclusive investment club” which raises money from about 10 wealthy investors in the Middle East region, who invest in the fund alongside DIC.

He says the fund looks to combine private equity due diligence with public company investing techniques. It looks for “special situations” or companies that “face short term issues that we believe can be turned around,” such HSBC and EADS.

However, shares in HSBC have fallen about 13 per cent since DIC’s investment was unveiled in early May and EADS shares have also struggled since it emerged.

DIC, which is part of Dubai Holding, has bought large stakes in other companies through other investment vehicles and recently pulled out of a takeover battle for Liverpool Football Club. It invested in Daimler, the German carmaker, in 2004.

The board of DIC already has an impressive array of non-executive directors, such as Peter Bonfield, former chief executive of British Telecom, and Victor Chu, the executive chairman of First Eastern Investment Group, the Chinese investment fund.

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