Istithmar buys 3% stake in hedge fund GLG(2)

Dubai-based Istithmar Capital has bought a minority stake in GLG Partners, as part of a reverse takeover and planned listing of the London-based hedge fund manager. It has also finalised a deal for US department store chain Barneys New York.

Dubai-based Istithmar Capital has bought a 3 percent stake in GLG Partners, Europe’s largest hedge fund manager with assets of over $20 billion (€14.9 billion), as the London-based firm looks to expand its activity in the Middle East and North America.

Istithmar’s investment comes as the hedge fund prepares to list on the New York Stock Exchange, via a reverse takeover by US-listed special purpose buyout vehicle Freedom Acquisition Group. The deal values GLG at about $3.4 billion, suggesting that Istithmar’s stake is worth just over $100 million.

Following the listing, which is planned for the fourth quarter of this year, Freedom will retain a 28 percent stake, while Istithmar and US bank Sal Oppenheim – which has also bought a 3 percent stake – will see their shares diluted, according to a banking source.

The investment is an opportunistic move by Istithmar, which has previously invested in GLG funds. Khaled Al Kamda, vice chairman of Istithmar, said his firm would help GLG to build its presence in the Middle East. He said the group would also continue to invest in the hedge fund’s funds, although he declined to comment on the amount it had invested to date. 

The banking source explained the European hedge fund’s move to list in the US, against the prevailing trend of US companies listing in Europe: “The US is an important growth market for them where they have a minimal presence, even though it makes up for around 60 percent of worldwide alternative asset investment.”

Istithmar has also bought US luxury department store chain Barneys New York from retail group Jones Apparel for $825 million.

The buyout firm said in a statement that US bank Citi is financing the deal and also taking an equity position. PEO reported last week that the Dubai-based group firm was in late stage talks to buy the retailer.