Dubai Group to invest $2b in China

Dalian: Dubai Group, owned by the emirate, is planning to invest around $2 billion in the Chinese financial and property sectors over the next year to 18 months, executive chairman Soud Ba'alawy said yesterday.

The investments in China will initially focus mainly on the investment banking as well as hospitality-orientated real estate, he told Reuters.

"It depends upon the opportunity, but I think that we have the potential to invest up to $2 billion of equity over the next, let's say, 12 to 18 months," Ba'alawy said in an interview on the sidelines of a meeting of the World Economic Forum.

"Tomorrow you might get a $200 million deal, tomorrow you might get a $2 billion deal - if it makes sense, we'll do it. But at least planning-wise we say, 'OK, maybe $2 billion would probably [do] for the next 12-18 months."

Ba'alawy said the group had held talks with a few financial institutions in China and would be looking to take stakes in top investment banks and potentially regional commercial banks.

It would also look to eventually get into the insurance sector in China, although that would come later, he said.

"Now our core strategy in China is really to select a few entrepreneurs that we can back up in the investment banking arena," he said.

In insurance, he said the group could take minority but meaningful stakes and develop the brands.

The group is only beginning to make direct equity investments in China; it set up an office in Hong Kong last year.

Mutual support

Parallel to the investments in China, the group was planning a big push to initially help Chinese manufacturing firms make investments in the Middle East and North Africa, he said, adding that it was planning a road show next week in Beijing.

That role could also extend to the financial sector, Ba'alawy said. "We also are ... planning to establish strong relationships with all the big banks, the investment houses [so] that we can help them to open doors in the Middle East and North Africa."

Beijing is encouraging its firms to make overseas forays to secure resources and energy.