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Sovereign wealth funds firing, but hiring
19 January 2009
Dubai’s government-run private equity and alternative investment arm, Istithmar World, is cutting 10% of its workforce as global markets continue to sour. Opportunities exist in other sovereign wealth funds, however.
The firm invests primarily in private equity opportunities in the US and Europe and, as these markets continue to tank, it has been forced to lay off 13 staff members.
Istithmar World didn’t reveal exactly where the cuts were likely to fall and says they have adjusted their “short-term business plans to capitalise on the opportunities that will open up when the economic recovery begins”.
It marks an about turn for the state run investment firm, which opened a New York office in mid-October 2008. David Jackson, CEO, said: “The current global market conditions have opened up many windows of opportunities for us.”
Istithmar World is not the only government entity to announce redundancies recently. Dubai International Capital, laid off seven members of its investment team in October, as it re-focused its efforts towards emerging markets. At the time, this accounted for 10% of its front office staff.
However, a spokesperson told us that in spite of the redundancies they’ve also been hiring relatively aggressively throughout 2008 – total headcount was 131 as at October last year, up from 87 at the end of 2007.
Another sovereign wealth fund to bolster its team recently was the Abu-Dhabi Investment Authority, which appointed Bill Schwab as global head of real estate at the beginning of January. He joined from JPMorgan.
One headhunter, who spoke on the condition of anonymity, confirms that SWFs are generally adopting a more cautious approach to hiring.
“Unusually, towards the end of last year, there was a rush to sign-off new hires, with the feeling being that this year would be tougher,” they said. “I think there will still be recruitment this year, but it’s definitely going to be more selective.”
There is need to allocate part to Emerging Markets.
Need for new breed of Fund Managers who care more for risks and ground realities and have managed corpus of funds under institutional set up for long periods and have undergone various cycles.
rohitmangla 23 Jan 2009
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