SINGAPORE,(Reuters) – Dubai government investment agency Istithmar is considering investments in China, the Wall Street Journal quoted its chief executive as saying on Thursday.
Istithmar comes under the umbrella of state-owned Dubai World, which also includes DP World DPW.DI, a container port handler that was forced by U.S. lawmakers to sell U.S. assets over security concerns.
“Everyone is aware of the backlash DP World faced in the U.S., and as a result sovereign wealth funds are looking toward non-developed markets to avoid such a backlash,” Istithmar CEO David Jackson was quoted as saying on the Journal’s Web site.
“Countries such as China, where we recently opened an office, are very welcoming to sovereign wealth funds, so more are looking to invest there.”
DP World was forced to sell its U.S. assets after agreeing to buy British ports and ferries group P&O for $6.8 billion last year. P&O operated at six terminals in the United States.
Dubai World, whose business include property developer Nakheel Group, has a multi-billion dollar global portfolio, including P&O, U.S. retailer Barney’s, a stake in Standard Chartered PLC, and about $20 billion in real estate assets around the world outside of Dubai.
“There is a lack of trust in sovereign wealth funds and better initiatives are needed to curb such suspicions,” Jackson said. “Countries such as the U.S., the U.K. and Germany are very reluctant to allow sovereign wealth funds in.”
Asian and Middle Eastern sovereign funds have made headlines recently by acquiring stakes in major financial firms such as Merrill Lynch & Co. and Citigroup Inc. and Switzerland’s UBS AG.
Merrill and Citigroup have received billions in cash infusions from sovereign wealth funds and are in talks to get even more capital from outside investors — raising eyebrows in Washington, where lawmakers have more closely scrutinized foreign investments in recent years, the Journal said.