Business Intelligence Middle East- Dubai International Capital has agreed to buy a $1.25 billion stake in the New York hedge fund Och-Ziff, the latest in a flurry of foreign acquisitions bysovereign wealth funds.
Much like the Chinese government’s purchase of a 10% holding in Blackstone just weeks before the private equity giant’s stock market float last summer, DIC acquired the 9.9% stake in Och-Ziff just days before it is expected to list on the New York Stock Exchange.
The transaction came on the same day that it emerged China’s Social Security Fund had met at least three American private equity firms about buying a minority stake in one of them.
The developments will surely add to the growing debate about whether there is sufficient transparency or regulatory controls on foreign state-owned entities. Flush with cash from record commodity prices and foreign exchange reserves, funds in the Middle East and Asia have begun to increasingly look abroad to invest, and to attract greater foreign direct investment as well.
DIC has been one of the most active investors in the UK. Its holdings include Merlin Entertainment, owner of Madame Tussauds, the budget hotel chain Travelodge, and HSBC, in which it has a minority stake.
