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Dubai Intl to invest $5 billion in India, China & Japan

Tue Feb 19, 2008 5:03am EST

Nathan Layne

TOKYO (Reuters) – Dubai International Capital, an investment fund owned by the ruler of Dubai, said it planned to invest about $5 billion in China, India and Japan over three years as a play on the rapid growth of emerging markets.

The fund’s chief operating officer, Anand Krishnan, also told a news conference on Tuesday the fund could raise its stake in existing holdings like Sony Corp (6758.T: Quote, Profile, Research) and was looking for potential investments in other Japanese shares.

Gulf investors spent $80 billion last year in foreign acquisitions, almost three times the amount they spent in 2006, according to data provider Dealogic.

Krishnan said Dubai International plans to raise its assets under management to $25-30 billion in the next three to four years from $13 billion now, estimating that India, China and Japan could make up one-fifth to one-sixth of the total.

“I would think the three countries in the next three years would take a share possibly of about $5 billion,” he said.

Krishnan said the fund was searching for opportunities in Japan’s auto industry and other sectors, such as entertainment, that have channels to growing demand in emerging economies.

“Clearly because of the growth in emerging markets, we believe companies having exposure to emerging markets will grow significantly as well,” he said.

He added that the fund would be open to raising its stake in Sony as it would with other major holdings, such as HSBC Holdings (HSBA.L: Quote, Profile, Research) and European aerospace company EADS (EAD.PA: Quote, Profile, Research).

SONY STAKE

Dubai International said in November it had made a “substantial investment” in Sony but did not disclose the size of the stake.

“More stock in Sony? If it makes sense for us from a returns perspective and we can get it at the right pricing, absolutely. We would look at any one of the stocks that we have invested in,” Krishnan said.

Dubai International Capital is the private equity arm of Dubai Holding, which is owned by Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum.

Separately in Singapore, Rabih Khoury, chief executive of DIC emerging markets, told Reuters in an interview that Asia accounts for 30 percent of its $2-$3 billion emerging market portfolio, but that share is expected to rise “north of 50 percent” in three to five years.

“For DIC emerging markets, Asia is our focus in 2008,” Khoury said on the sidelines of an investment conference in Singapore.

“We are already in India and we are focusing on investing in China”, and other Asian companies, such as Singapore, Indonesia, Thailand, Philippines and Malaysia.

Khoury said the firm plans to establish single-country funds — typically $200 million each — to invest in Asian companies, such as infrastructure firms.

(Additional reporting by Saeed Azhar in Singapore; Editing by Lincoln Feast)

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