Abu Dhabi's ADIC eyes investments in South Korea

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MONEY WISE: Abu Dhabi has been using part of its oil income to diversify its economy and invest abroad. (Getty Images)

State-owned Abu Dhabi Investment Co (ADIC) said on Friday it is diversifying investments into South Korea and Asia as it seeks to also attract inward investment.

ADIC, Korea Development Bank (KDB) and the Korea Trade Promotion Agency (KOTRA) signed an agreement to help increase investment flows between South Korea and the Middle East and North Africa region, ADIC said in a statement.

The agreement lays the groundwork for cooperation in many areas, including cross-border mergers and acquisitions, private equity, infrastructure and portfolio equity investment.

"This is an important step, which should lead to some exciting investment opportunities both in South Korea and the MENA region," said Nazem Fawwaz Al Kudsi, ADIC's chief executive. "The Middle East should not just be regarded as a source of capital but also as an investment destination."

Abu Dhabi, which is part of the UAE, has been using part of its oil income to diversify its economy and invest abroad. The UAE ranks as the world's fifth largest oil exporter.

"Investment funds in the Middle East are diversifying to include direct investments in Asia and Korea in particular," said Cho Hwan Eik, president of KOTRA. "Through this MOU, we expect investment flows between Korea and Abu Dhabi to increase significantly."

The South Korean government hopes to boost foreign direct investment by seven percent this year to $12.5bn, with special Free Economic Zones at the forefront of its strategy, the statement said.

ADIC also said on Friday it is buying a stake in a Russian resort being built for the 2014 Winter Olympics in the Black Sea resort of Sochi.

ADIC joins Russia's largest bank Sberbank Rossii which has a 25.01 percent stake in the project, ADIC said in a statment without disclosing the value or how much stake it would take.

ADIC and Sberbank are joined by the government of the Krasnodar region, the government of the city of Sochi and other partners in the project, with the financing support of Vnesheconombank, it said.

Russia said earlier this week it will slash its state budget for the Winter Olympics by more than $600 million due to the economic crisis but promised that state-controlled companies would make up the difference.

This is ADIC's first investment in Russia and the first investment from the United Arab Emirates in Olympic games facilities.

Gornaya Karusel which will be home to the Russian National Ski-jumping Centre from 2012 onwards, will offer over 200 kilometres of ski slopes, and 28 cable lift stations. (Reuters)

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