A pair of interesting articles on the rise of Middle Eastern financial institutions, courtesy of the WSJ.  First, was Gregory Corcoran’s comments on Dubai’s ruling sheik’s plans to open an investment bank – Al Noor Islamic Bank – that will compete in the Middle East and Africa and eventually move in on Europe and the U.S.

Second, as this Wall Street Journal article points out, the Persian Gulf’s petro-states control a vast hoard of invest-able funds.  It is likely that Al Noor will be sitting at that nexus to facilitate such deals — alongside other Middle Eastern banks that sure to emerge as well.  Given increasing wealth and trends towards global deal-making, it will not be surprising to see a Middle Eastern investment bank give traditional firms a real “run for their money” in the next decade or so.

“… the Abu Dhabi Investment Authority bought about 10% of a quasipublic listing of shares in Apollo Management, a New York private-equity fund. When Fortress Investment Group LLC went public in the U.S. early this year, Persian Gulf government investment authorities were among the first prospective investors Fortress executives visited to market it.

Dubai’s various government investment arms have stakes in British banks HSBC PLC and Standard Chartered PLC and in the owner of Airbus, EADS. Some in the Middle East felt their money was unwelcome in the West after the resistance a Dubai company faced last year when it bought the operator of U.S. ports. But the state holding company that owns many of Dubai’s business projects and some of its investment arms has just agreed to sink $5 billion into MGM Mirage and one of the hotel-casino company’s projects.

Gulf sovereign-wealth funds might even become competitors of the buyout firms in the future, since the government funds needn’t borrow to wield large sums of cash in a deal. Qatar’s investment fund last month bid $24 billion to acquire British supermarket chain J Sainsbury PLC, after bidding but losing in a $16 billion auction for U.K. utility Thames Water.…”