Istithmar chief to stay at the helm

DUBAI // Dubai World said the chief executive of its investment arm, Istithmar World, will continue to lead the firm despite reports that his position is under review and the investment house will be restructured amid an investment freeze. Istithmar said last week that its two investment officers, John Amato and Felix Herlihy, were leaving the firm to explore other opportunities, prompting speculation that David Jackson, the chief executive, was also set to depart.

"Reports that ? David Jackson had left the company were incorrect and Mr Jackson continues to lead the investment house with Dubai World's full support," the state-owned conglomerate said in a statement. It follows weekend claims that Istithmar is halting investments as part of a restructuring effort after spending more than Dh91.75 billion (US$25bn) in the last decade on stakes ranging from a yacht marina to luxury retailer Barneys New York, Bloomberg reported, citing informed sources.

But yesterday, Dubai World declined to comment on the investment freeze or the restructuring plans of the firm. It said: "Istithmar World is one of the Dubai World's key subsidiaries, actively managing a portfolio of worldwide investments and will continue to be a key subsidiary into the future." Istithmar, like many other regional investment entities, has been hurt by a decline in the value of some of its assets after the global financial crisis.

Its investments include CityCenter, a $11bn mixed-use project in Las Vegas, and Barneys. "Wherever Dubai could, it should merge businesses to get synergies and stop duplicating investment ideas," said Robert McKinnon, the head of research at investment bank, Al Mal Capital in Dubai. Last month, Istithmar hired an advisory firm to help it come up with options to shore up Barneys financial position.

Government-related firms in the emirate are hoping to draw on Dubai's $20bn bond programme for funds to continue financing their projects. Dubai borrowed the first $10bn tranche from the Central Bank and it is thought that the second tranche may come from a combination of the bank and international investors. Dubai World also controls Nakheel, the developer behind Dubai's Palm islands, which has a December 14 deadline to pay its $3.5bn Islamic bond.

Istithmar World is engaged in private equity, venture capital and aviation investment through three subsidiaries. With assets of more than $10bn under management, its stakes range from the Yacht Haven Grande, a marina complex in the Caribbean, the W Hotel Union Square in New York and the hedge fund GLG Partners. It also owns stakes in Dubai Aerospace Enterprise, the commercial executive jet firm Daallo Airlines and Standard Chartered and Arcapita banks.