Zabeel Investments was launched during the hey days of Dubai when the emirate was the darling of the financial world and the emirate was keen to cultivate its reputation as a discerning global investor.
Led by Sheikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, the investment house was keen to participate in the global opportunities that were on offer at the time.
Launched in February 2006, Zabeel considered itself an investment company "focused on the areas of commercial real estate development and management, private equity and asset management across a wide range of economic sectors in the UAE," according to a company statement.
But it didn't restrict itself to the UAE and picked up stakes in some of the biggest blue-chips in the world.
But the global financial crisis took its toll on the company's investments and the company was left negotiating with banks to restructure USD1.6-billion of debt.
A Thomson Reuters report revealed Zabeel will now be managed by the Dubai Real Estate Corp.
Zabeel was part of the Dubai Inc. group of companies that had enjoyed leveraged growth during the boom investment period of the mid-2000s, but are now struggling as the global and Dubai economy continues to deleverage.
While the emirate has worked hard to resolve the debt issues facing key entities such Dubai Holding, Nakheel, Dubai World and a number of other firms, it still has a long way to go.
"Despite gradual fiscal consolidation projected in the baseline scenario, Dubai's government debt is estimated to increase to 41% of GDP by the end of 2016," states the International Monetary Fund. "In the absence of fiscal consolidation (i.e., without policy change compared to 2005-09), however, it is projected to reach 53% by 2016."
In many ways, Zabeel's troubles are a reflection of the pain Dubai economy must go through and underlines that the debt hangover will continue to linger for some time to come, despite the improved business confidence in the emirate.
Here's a look at some of Zabeel's major investments since its inception:
European Aeronautics Defence and Space Company (EADS): The company teamed up with Dubai International Capital Asset Management (DICAM) to acquire a stake in EADS, maker of Airbus A380. The European company's stock price stood at around EUR20 in early 2007 and currently trades at EUR25.
Sony: As part of its partnership with DICAM, Zabeel also picked up a stake in Japanese electronics company Sony. Though the company never disclosed its investments, media reports suggested at the time it could be as much as USD1.5-billion.
The Japanese giant has struggled since then as it faces nimble and competitive rivals such as Apple, Microsoft, HP and Lenovo in its various product lines. Sony's stock price stood at 6,940 yen in mid 2007 but currently stands at just under 1,000 yen.
Zabeel reportedly sold stakes in both Sony and EADS.
ASP Access Floor: In February 2009, Zabeel Capital, a unit of Zabeel Investment, acquired a 51% stake in ASP Access Floors' operations in the UAE, which ran the company's operations in the Middle East and Asia. Founded in Australia, the company specialises in the manufacture, installation and supply of turnkey raised flooring solutions across the globe.
Abraaj Capital: One of the region's largest private equity firms, Abraaj is an influential investor with significant investments across the region. Abraaj's other shareholders include Sheikh Khaled Bin Zayed Al Nehayan, Deutsche Bank, DIFC Investments, and Sheikh Sultan Bin Saqr Al Qassimi, among others.
The investment house has a number of structured funds through which it has acquired stakes in Air Arabia and Karachi Electric Supply Company, among others. Zabeel still has a stake in Abraaj, according to Zawya.com.
Arzaq Holding: Zabeel was one of the founding partners of the company with a paid-up capital of AED150-million. The company has invested in Gulf Marinas, Seaspray Marine Engineering and Services and International Houseboats - all UAE-based companies. The company's original mandate was to invest in financial and real estate sectors across the GCC.
Asteco: Asteco Property Management is the UAE's largest property services company. Zabeel also invested in Asteco Development Management.
Capital Club: The Capital Club is Dubai's premier private business club located in the Dubai International Financial Centre (DIFC).
Depa United Group: The group was formed in 2006 to combine over 12 diversified companies as subsidiaries, specializing in the full scope fit-out and furnishing of five star luxury hotels, yachts and facilities. Dubai-based Depa has branches in Doha, Cairo, Casablanca, Khartoum, Jeddah, Milan and Shanghai.
Emaar Industries & Investments: Zabeel has a 12% stake in EII via Zabeel Capital. EII is a unit of Emaar Properties which holds 40% of the company, according to Zawya.com. The company owns Mammut Building Systems, Multiforms and has investments in Depa Limited, Bahrain Investment Gateway and Dynergy Technologies.
Empire Aviation Group: EAG was founded in 2007 to manage the regional aviation interests of the UAE-based Emirates Investments Group. The company operates one of the region's largest managed fleets of business jets, with more than 20 aircraft under management, operating out of Dubai International Airport.
Madaares: Maaderas was launched by National Bond Corporation to focus on the country's education sector. Its subsidiary Taaleem operates nine educational institutes, according to Zawya.com data.
The Light Group: The Las Vegas based hospitality company manages and operate a number of food and beverage establishments in hotels in Las Vegas, Miami and Dubai.
Zabeel Properties: The unit of Zabeel Investment 100% owns Jumeirah Zabeel Saray and Tiara Residence.
Other developments and projects include Americas Hotel and Resort, Dubawi Island Hotel and Resort, Essque Hotels and Tiara United Towers.
ZED Communications: The communications consultancy offers corporate and brand identities, to above and below the line advertising and CRM solutions.
ZSML Construction: Zabeel tied up with Turkey-based Sembol Construction to build hotels in Turkey, Kazakhstan and Ukraine.
In addition, the company also tried to buy U.K.'s legendary football club Liverpool and a second division team Charlton Athletic. Both deals were scuttled.
© alifarabia.com 2012
