Sony Sells Sizeable Stake to Dubai State Investment Fund

November 30, 2007 12:27 PM
by findingDulcinea Staff
Dubai International Capital’s move boosts Sony’s shares; the purchase is the latest by United Arab Emirates in a series of investments in international holdings.

30-Second Summary

Dubai International Capital (DIC), a sovereign investment fund owned by Sheikh Mohamed bin Rashid al-Maktoum, the ruler of Dubai, bought a 1 percent stake in Japanese technology manufacturer Sony on Nov. 26.
This purchase, worth an estimated $500 million, pushed up Sony’s stock by 4.6 percent on the Tokyo stock exchange, the Nikkei.

The Sony transaction is the most recent in a spending rush powered by Gulf-based capital. The DIC also recently added British hotel chain Travelodge and U.S. hedge fund Och-Ziff Management to its portfolio and is planning to back a Virgin buy-up of shares of beleaguered U.K. mortgage broker Northern Rock.

The UAE firm has spent more than $10 billion since its inception in 2004. Of the region’s booming fortunes, the Washington Post writes, “Much of the wealth of the United Arab Emirates comes from oil. As these countries’ proven oil reserves are depleted, their rulers are seeking to invest oil income in other industries to ensure their financial future.”

Fellow emirate Abu Dhabi has also followed the spending trend. Its state investment arm, Mubadala Development Corporation, recently spent $622 million for a stake in U.S.-based Advanced Micro Devices, as well as a 7.5-percent stake in investment bank the Carlyle Group.

Some $37 billion has been invested in Western financial institutions by government-run funds based in the Middle East and China.

“Bankers say there is a big appetite among wealth funds for further investment in financial assets hit by the credit market turmoil,” said the Financial Times.

Headline Links: The United Arab Emirates raises its financial stakes in the West

Background: Abu Dhabi and Dubai’s state investment arms

Reactions: ‘An exciting time’

Opinion & Analysis: The power of sovereign funds

Reference Material: Investing at the source

Related Topics: The UAE’s Foreign investment interests


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