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03 October 2023

Dubai Group continues to go slow on new investments

Investments slowed as the market slowed, says Tom Volpe (CRAIG SCARR) 

By Karen Remo-Listana

Dubai Group's pipeline of new investment has slowed down since the second half of 2008 and will continue to be slow so long as the market remains soft, a top official from the company said.

According to Tom Volpe, Group CEO of Dubai Group – an acquisitive investment unit of Dubai Holding – all its investments have been impacted by the slowdown, adding that they have started to "back-off" from new investments beginning August last year knowing the economic battering will continue "for a while".

"If you look at the rate of our new investments, we basically haven't made any new ones since the slowdown started," he said. "The phase of new investments slowed as the market slowed. And as long as the market continues to be soft, it will continue."

Volpe said the group is still looking at opportunities, especially in the Middle East and North Africa region.

"We've always looked at the Mena region," he said. "When you are in the investment business, you always look at sustainability. And for an entity headquartered in this region, we have better access to deals in Mena."

Volpe said Dubai Group is also interested in making investments in Africa, noting that the continent would be an important area in the next 10 years.

"We've always invested in North Africa but we're also learning more and more about South and sub-Saharan Africa. We have some people in Cameroon. We are educating ourselves on the economy right now, there's no investment imminent. We are looking at financial services – commercial banking, consumer finance – so anything we do will be related to that," he said.

He said the company "will not be closing any investments in the next month" and will be watching the market "very closely" this year. Although the pipeline is slowing down, Volpe said they are always searching for investment opportunities.

"We're always looking at deals, we are in an agreements business so we never stop making a deal," he said. "We don't budget any amount of money to spend. When we see an interesting deal, then we'll look at investing. It's hard to predict how many deals we'll be doing this year. It depends on the markets but the phase is definitely slowing down."

Dubai Group manages more than $40 billion (Dh147bn) and includes a diverse group of six companies, each with a specific sector and geographic area of operation as its focal point.

Dubai Investment Group is the global financial investor of Dubai Group; Dubai Banking Group is its global Shariah-compliant investment arm; Dubai Insurance Group is its global insurance arm; Dubai Capital Group deals with investment activities in Mena; Dubai Financial deals with the acquisition of financial services companies; and Noor Investment Group is another Shariah-compliant financial institution.