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Sun 24 Dec 2006 04:00 AM

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Seeing investments differently

With Dubai-based companies snapping up foreign companies left, right and centre, the days of hiding Middle Eastern fortunes are over. Regional companies must go into the battlefield of enterprise and take a chance.

Seeing investments differently

What makes a good investment and why do you invest? To make more money? To create a better world and, through allied programmes, to put back what you may have taken away? As corporate responsibility and social awareness increase and companies become more aware of environmental issues and pressures, investment is shaped by factors once not factored into the equation.

There are demographic considerations and geo-political realities. There are regional sensitivities and work ethics that change rapidly. What was relevant ten years ago is no longer valid today, therefore we have to keep pace with the changing priorities.

In a new era of fiscal prudence, there are fresh entrants. The arts scene, sports world and the audio-visual media industry have created a new dynamic for investors. If you can buy Manchester United purely because it is a financial entity, then you bid for it. That they play football is incidental — they are a viable commodity. By that measure the geographical boundaries of the past are dissolving and investments in high profile and productive entities are becoming the norm. Take a quick glance at some of the acquisitions of the past few months from our own backyard.

Dubai International Capital’s (DIC) move towards taking a share in Liverpool FC; Dubai Ports hard fight for running US ports (from the P & O deal). DIC has obviously made many ‘signature’ high profile acquisitions recently — the Tussauds and Doncasters Groups, for example. Jumeirah has also been snapping up key iconic location hotels, such as Essex House in New York City and a potential high-rise on the Thames in London and Emaar has acquired Hamptons International, a leading UK real estate broker.

Now, there may be a school of thought that believes that capital is flowing out of the country and should be retained. I disagree. These are sound business decisions. They should not be seen as conquests or triumphs — every such success is a victory and it places the banner of Dubai and the Middle East across the globe. The high profile nature of these acquisitions frequently come at the end of a well thought out and researched campaign and make the presence of Dubai as a player on the world’s stage that much stronger.

There are two very important elements in this approach. One, Dubai and the region diversifies and places its imprint of excellence on whatever enterprise it integrates with, thereby raising its credibility factor. And two, it widens our own horizons and deflects us from the comfortable and dangerous temptation of staying at home and locking the door to outside investment. The days of hiding our fortunes under the bed are over. We have to go out into the battlefield of enterprise and take that chance.

The more daring will agree that this is not capital fleeing the country. This is a seeding of capital in faraway fields ensuring that we have a share in the harvest. We will make friends and we will export our culture. Business brings peace and the more partnerships that are made across boundaries, the stronger the promise of peace and prosperity.

If the region follows the Dubai example and opens the windows on its portfolios, if it can rise above the parochial and the insular and use its ample strengths and its liquidity to its advantage there is no reason why a new surge cannot be generated.

Let me say this in as unequivocal fashion as possible. There is nothing in our information driven hi-tech world that is not meant for business. From football teams to chocolates, from clothing to furniture, from art and sculpture to music, from architecture to history; all these are investments. Once we see the obvious logic of seeing these holdings as strategic moves of the financial chess board we will find ourselves moving with the big players and also being recognised for our worth.

Let me end on a domestic note. Our country’s investment in horses and stables and the creation of a new dimension to global equine standards was not just a sport, it was a business. It traced our traditions, it reflected our history and our heritage, it was giving back to that magnificent animal all that it had given us.

But as Dubai strode across the paddocks of the world it is run as a business.

Let us go out there. The world is waiting.

Rashid AW Galadari is the chairman of Galadari Investment Office (GIO)