The politicians and press of developed nations may have qualms about the growing power of sovereign wealth funds and state-backed vehicles from emerging markets in international finance. But the world of alternative investing has no such concerns.
Three of the largest US private equity groups have held talks with China’s Social Security Fund about selling a minority stake. Blackstone cosied up to the Chinese before its float while Carlyle already has the Mubadala arm of the Abu Dhabi government on board as an investor. Apollo Management locked in its valuation with a deal with a different government arm in Abu Dhabi.
And now Och-Ziff Capital Management has agreed to sell a 9.9 per cent stake in itself to Dubai International Capital for about $1.25bn when the US hedge fund completes its planned flotation.
The deal, through which DIC will take 31.8m shares in Och-Ziff, comes after a credit-induced squeeze on the fund’s proposed valuation as part of its IPO.
Of course, its not just the alternates getting in on this act. Bear Stearns has drafted in Citic as a prop while Barclays turned to both Chinese and Singaporean friends to help out with its bid for ABN – a move that proved unsuccessful.
Some might wish for more transparency – but weight of money and willingness to move fast seems to be holding ample sway for financial leaders in the west.
As we’ve said before – finance is flat.