Gulf firms shy away from US distressed assets

Emirates Business 24/7 – Cheap they may be, but not all cash-rich Gulf investors are up for buying distressed assets in the US.

Such a move historically was a good way to make a profit. A good fund manager can buy up distressed assets for pennies on the dollar and figure out ways to sell them down the road for nickels or dimes on the dollar.

It’s a reasonable business proposition, and there are a handful of cases where investors made big profits from buying distressed assets following bursting bubbles. But with a global meltdown on the horizon, not everyone is willing to take a risk.

Dubai Group, a financial conglomerate of Dubai Holding, for one is planning to launch a fund of funds in the first half of 2009 to invest in the US and European markets. The fund, according to Tom Volpe, its group chief executive would not buy distressed assets but rather focus on traditional asset management and private equities. "Are we going to buy distressed assets? The answer is, ‘No’," he told Emirates Business. 

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