Signs of the Middle East’s Financial Colonization of American Capital Markets?

The Financial Times recently reported that Colony Capital, the US private equity group and one of the world’s largest property investors, is considering selling a stake to a Middle Eastern sovereign wealth fund.

While Colony declined to comment on which Middle Eastern sovereign fund it was discussing a deal with, the report noted that:

“…Mubadala, an investment arm of the Abu Dhabi government, in September struck a deal to acquire a 7.5 per cent stake in Carlyle, the Washington DC-based private equity group. The Abu Dhabi Investment Authority in July acquired a large stake in Apollo Management of New York. Last month, Och-Ziff Capital Management, the US hedge fund, agreed to sell a 9.9 per cent stake to Dubai International Capital….

…Colony has close ties with the Middle East. In June, it agreed a landmark $3.5bn deal to buy a majority stake in Tamoil, the refining group, from the Libyan government. Colony is also part-owner of Fairmont Hotels, the Canadian luxury lodging group, alongside Kingdom Holdings, the investment vehicle of Prince Alwaleed bin Talal of Saudi Arabia. Mr Barrack is the grandson of Lebanese immigrants.

“I tell my young warriors that the Wild, Wild West is the East. Windfall petrodollars combined with a reluctance to invest in a less tolerant West has produced a boom. The Middle East, India and China are the current boom,” he said…”

Given the convergence of highly liquid, petro-dollar flush investors from the Middle East; the current subprime-related crunch here in the U.S.; and the continued wave of private equity shops looking for both deals & backers, this Middle Eastern trend is sure to continue in the months ahead.

This entry was posted on Thursday, November 15th, 2007 at 6:12 pm and is filed under Abu Dhabi, Dubai, UAE.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.