Saudi Arabia seals acquisition of 15% stake in London’s Heathrow

Saudi Arabia’s Public Investment Fund concluded its yearlong quest to buy a chunk of London’s Heathrow Airport, joining an ownership group that includes the sovereign wealth funds of Qatar and Singapore.

The PIF will own a 15% stake in FGP TopCo, the holding company that controls Europe’s busiest airport, after the deal was finalized on Thursday. The Saudi fund bought into Heathrow at the same time that Paris-based private equity firm Ardian acquired a 22.6% stake in the airport, which has a market value of about 8.7 billion pounds, or  $11 billion.

“Heathrow acts as a crucial gateway to the world, and we look forward to supporting Heathrow’s management in its efforts to secure the sustainable growth of the airport and to continue to maintain its position as a global aviation hub,” Turqi Al-Nowaiser, PIF Deputy Governor and Head of International Investments, said in a statement.

The Saudi fund, which manages some $930 billion in assets, has acquired a range of holdings in the U.K. that includes the Newcastle United football club and large stakes in Selfridges department store and the Rocco Forte luxury hotel group.

Among Heathrow’s owners are the Qatar Investment Authority, which holds a 20% interest, Singapore’s GIC sovereign fund and the Australian Retirement Trust.

Singapore’s DBS bank sees Dubai as hub for Mideast expansion

Singapore’s DBS Group Holdings, the largest bank in Southeast Asia, is spreading its wings and eyeing Dubai as a springboard for expanding activities in the Middle East.

“There’s an opportunity to scale it up,” CEO Piyush Gupta told Bloomberg during an interview in the UAE financial center this week. “We’re revisiting the thesis that there is real opportunity to do more stuff out of Dubai and this region.”

Both Dubai and Abu Dhabi have emerged as attractive bases in the MENA region for hedge funds, investment banks and other financial firms.

International businesses appreciate the ease of doing business in the UAE, the low taxes and the Gulf state’s position as an international travel hub.

GoldenTree Asset Management and Millennium Management are among the New York-based hedge funds that have recently set up shop in Dubai.

Singapore’s $288 billion Temasek sovereign wealth fund has also made several co-investments with Mubadala and other UAE institutions.