Saturday, November 01, 2008

Sovereign wealth will continue to slosh around the world

The message from the sheiks: no need for bluster and starlets; Abu Dhabi’s money ... speaks for itself.
Sheikh Mansour, who [besides being the 32-year-old director of Abu Dhabi’s high-profile development fund, Mubadala, and chairman of the British football club Manchester City] is also chairman of the International Petroleum Investment Company, invested almost £3.5 billion ($5.77 billion) in Barclays, one of Britain’s largest banks — for a stake that could reach 16 percent of the bank.

Qatari investors will hold up to another 15.5 percent.

With markets in turmoil and some big sovereign wealth funds losing billions on Western bets, one of the questions hanging over the new world economic disorder has been whether sovereign wealth and other state funds will continue to slosh around the world. The new Barclay’s investment offered a resounding yes.

“We are not going to be running away when the market is down,” Mr. Mubarak said in a brief interview last month. “There are a lot of interesting opportunities out there.”

There are also calls for greater regulation of state-run funds, fears of a global recession, and oil’s fall from $145.29 a barrel to just $67.81 on Friday. But Abu Dhabi sits atop about 9 percent of the world’s oil reserves and still has the cash to spare.

Unlike its larger-than-life neighbor Dubai, it has been until recently hyperdiscreet about how it deploys its windfall. But now that it is emerging from the shadows, it is looking for attention — but not the kind of flash-and-dash that Dubai is known for.
Grape Shisha provides commentary worth reading.


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