Istithmar invests in new Perella firm

Former Morgan Stanley banker Joseph Perella formally opened his new firm today, Perella Weinberg Partners, and announced a $100 million injection of capital from Dubai-based Istithmar PJSC.

After much anticipation, legendary investment banker Joseph Perella formally opened his new financial services firm today and announced a $100 million (€79 million) investment from Dubai-based private equity firm Istithmar PJSC. The investment brings the total capital raised by the new firm, which will be called Perella Weinberg Partners, to over $1.1 billion. The firm has ten other investors including Mitsubishi UFJ Financial Group and Gulf Investment Corporation, which is owned by the six member states of the Gulf Cooperation Council.

Perella has been putting the firm together since he quit Morgan Stanley last spring after a power struggle with the bank. Peter Weinberg, who is a veteran of Goldman Sachs and ran the bank’s European operations, has joined Perella. A statement from the firm says that it now has 11 partners and 30 people who either are or have agreed to be employees.

Perella is best known for his and his former partner Bruce Wasserstein’s part in the unprecedented $31 billion bid for RJR Nabisco, which was later portrayed in the 1990 book Barbarians at the Gate.

As investors complain that recent expansion into investing by major players such as Goldman Sachs and Morgan Stanley are creating conflicts of interest with their advisory services, demand has risen for smaller shops with fewer potential complications. Parella Weinberg will focus on advisory services but will also provide startup capital to seed investment platforms.

Istithmar, based in the United Arab Emirates, was established in 2003 with an initial investment pool of $2 billion. The firm has invested in 35 companies to date deploying about $1.6 billion in equity capital, focusing on the financial sercies, real estate, industrial and consumer sectors.