Dubai International Capital LLC (DIC), the international investment arm of Dubai Holding, and First Eastern Investment Group (First Eastern), the leading China private equity firm and the first Chinese investment bank to be established in the Dubai International Financial Centre (DIFC), announced the launch of a new fund, China Dubai Capital, which will target opportunities in China's growing economy.
China Dubai Capital will invest in Chinese companies which could create synergies with the UAE's economic growth and with the potential to be listed on the Dubai securities markets. The fund is seen as an important initiative that will serve to strengthen and benefit from the rapidly-developing economic ties between China and the UAE.
Sameer Al Ansari, Executive Chairman and CEO of DIC said, “We are pleased to partner with First Eastern to establish China Dubai Capital. First Eastern is the first Chinese financial institution to be established in the DIFC and has an unrivalled track record in direct investments in China. Through this fund, we will invest in feasible and profitable business opportunities in commercially-attractive sectors. The establishment of China Dubai Capital provides investors the opportunity to participate in a vehicle which will generate superior returns.''
Victor Chu, Chairman of First Eastern Investment Group, added, “This is a unique opportunity to create a win-win situation for China and the UAE. Chinese companies are very attracted by the opportunities arising from the opening up of the Gulf region. The UAE, particularly Dubai, is strategically positioned as the natural gateway for GCC access, as well as for capital raising through its established securities markets. Our new fund will be in a great position to generate exciting returns from the synergies between these two regions.''
China Dubai Capital will invest in a wide range of vibrant sectors including infrastructure, resources, healthcare and services. The first closing of the fund will take place in May 2008 with at least $500 million from investors predominantly in Asia and the GCC. The final closing is expected to take place in October bringing the fund up to $1 billion. The General Partner of the fund is a joint venture between First Eastern and DIC.
China Dubai Capital is an important initiative within DIC's Emerging Markets division. Anand Krishnan, Chief Operating Officer of DIC, said, ''Our stated objective is for DIC's Emerging Markets division to manage assets in excess of $5 billion in Asia, the Middle East and North Africa in the next three years. The launch of the China Dubai Capital Fund is a significant step towards achieving that goal and we look forward to capitalising on First Eastern's wealth of expertise and on-the-ground resources in the Far East. In addition, the development of such single-country funds is part of our strategy of diversifying our portfolio of investments to include a wide range of attractive asset classes.''
In addition to providing Chinese companies with growth capital, China Dubai Capital will complement their existing management teams with the additional management, legal and financial expertise and business network necessary to achieve superior investment returns.
Both DIC and First Eastern manage successful specific country funds. DIC manages Jordan Dubai Capital, a $300 million investment fund which sources a wide range of transactions, ranging from financial services to power and real estate. The company also recently announced plans to launch a single-country fund to target Private Equity opportunities in the Kingdom of Saudi Arabia. First Eastern currently manages over $1.5 billion dedicated to direct investments in China and has recently launched a specific country fund, the Japan China Fund. Over the last 20 years, First Eastern has established a strong network in China and has been instrumental in generating over $5 billion in direct investments through its portfolio of over 100 projects across the region.
China and the UAE enjoy dynamic and positive bilateral relations. In April 2007, the two countries signed a Memorandum of Understanding aimed at developing economic relations. The volume of trade between the UAE and China reached $20.4 billion (Dh74.9 billion) in 2007, representing an increase of 41.2% on 2006. The UAE is home to nearly 200,000 Chinese people and more than 2,000 Chinese companies.
