The new owners of the crown jewels

It's a sign of the times when part of the UK's crown jewels are sold off to an Arab consortium.

But the news that the Metropole building and 10 Whitehall Place, part of Queen Elizabeth II's real estate portfolio in London, were sold to Dubai based International Hotel Investments for US$255million came as no surprise to me.

After all sovereign wealth funds from across the Gulf are investing heavily in Europe, Asia and America in every sector - from real estate and financial institutions to hotels and supermarkets. The Metropole and 10 Whitehall Place are not the only London landmarks that have been snapped up by Arab sovereign wealth funds.

Just last month the Qatar-based sovereign wealth fund Diar Real Estate and Investment announced it was preparing to raise US$2.5 billion to buy the Chelsea Barracks in London. The barracks are being demolished and replaced with luxury housing in what will be Great Britain's most expensive property deal ever.

And London's famous Savoy Hotel is currently undergoing a multi-million dollar re-fit under the ownership of Kingdom Holdings.

If this were a game of Monopoly then sovereign wealth funds' investments would be sweeping the board.

And why shouldn't these funds go shopping when rising oil prices mean they have so much money to spend?

What is also a sign of the times, however, is the reaction from some Western governments to the investments that are being made. Some might describe as paranoid the outcry from politicians who have called into the question the motives of sovereign wealth funds.

There have been calls for greater transparency, regulatory measures and greater scrutiny of the investments made.

Some have even suggested that the investments made by sovereign wealth funds could pose a threat to the national security of the countries in which they are investing - you only have to look at the reaction by US politicians to the sale of P&0 to Dubai Ports World to see how much paranoia these investments can generate.

At the time the sale provoked powerful opposition from US politicans.

What is often lost in all the controversy surrounding the purchases being made by sovereign wealth funds is just how much the global economy is benefiting from these funds.

We should not forget just how positive a move it is by oil rich Gulf governments to invest their surplus funds in western interests.

The US, hit hard by the sub-prime mortgage crisis, needs the financial assistance that sovereign wealth funds can provide like never before. Indeed these funds have provided valuable lifelines to the likes of Merrill Lynch and Citigroup. Abu Dhabi Investment Authority (ADIA) has invested US$7.5billion in Citigroup while the Kuwait Investment Authority has agreed to invest US$5billion in Citigroup and Merrill Lynch.

As a London resident, I for one hope that funding from the new owners of the Savoy and the Whitehall Place will ensure that these historic monuments are kept in mint condition for years to come.

Andrew Neil is currently chief executive of Press Holdings Media, chairman of ITP, chairman of World Media Rights and a presenter of This Week (BBC1) Daily Politics (BBC2) Straight Talk (BBC News24).

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