Some of private equity's most powerful tycoons, including Blackstone founder Steve Schwarzman, KKR's Henry Kravis and David Rubenstein of Carlyle Group, flew to Dubai last week to lure investors from the cash-rich Gulf states, it emerged this weekend. New research revealed that despite the credit crunch, sovereign wealth funds are continuing to snap up prime Western assets.
The funds, many of them based in the Middle East, spent more than €21bn (£16bn) acquiring stakes in European and US firms in the first six months of this year, suggesting they will match the €43bn invested in 2007, according to a study by the ZEW research institute in Mannheim.
Its findings point to a number of large recent investments, including €566m of Visa shares acquired by the Kuwait Investment Authority earlier this year, and the 20 per cent stake in the London Stock Exchange taken by the Qatar Investment Authority.
Brendan McMahon, a partner at PricewaterhouseCoopers and head of its private equity practice, said sovereign wealth funds were increasingly eyeing up private equity, too. 'Chinese funds have taken stakes in groups such as Blackstone. There has been speculation over deals with Apax. These funds have $3 trillion to deploy and private equity funds have diversified asset classes and jurisdictions. It is a perfect fit.'
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