Sameer al-Ansari: Liverpool he lost, but could there be a Dubai connection in the bidding for Northern Rock?

Maggie Lee meets the head of an investment company with royal approval, founded just three years ago and already making waves in the UK
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The Independent Online

Sameer al-Ansari, founder and chairman of Dubai International Capital, chooses his words carefully. Asked whether his fledgling company could be a backer for a possible bid by Sir Richard Branson for the Northern Rock bank, he smiles and says: "You know the answer to that. There's no answer. All I can say is that we're currently looking at two deals – one here, the other in Germany."

His relentless good humour – in victory or defeat – is attractive. A dedicated Liverpool fan, he laughs as he recalls the rejection of DIC's £157m offer for Liverpool football club last year. "It took me two weeks to get over that, but it didn't dent my passion, I still went to every match when I was here."

The defeat seems a minor one when contrasted with the successful bids DIC has made for three UK companies over the past three years. Through a series of secondary buyouts from private equity firms, it first acquired the Tussauds Group for £800m, then Doncasters (manufacturers of precision engineered components and systems) for £700m, and more recently the Travelodge hotel chain for £675m. In June it also acquired Mauser, the German industrial packaging company, for €850m (£590m).

The company has been active in the public equities arena too, acquiring a 2 per cent stake in DaimlerChrysler for $1bn in 1995, and this year taking a substantial stake in HSBC Holdings. And despite the current whipsawing in global markets, Al-Ansari has ambitious targets for the next three years. "We aim to more than treble the value of assets under management from $7bn [£3.4bn] to just under $25bn," he says. "Our primary growth will come from a mix of private equity deals and investments in listed stocks, alongside the development of our businesses in the Middle East and North Africa."

He also expects that the opening of European offices in London last month will bring more investment opportunities in Europe and the US.

DIC is no ordinary investor. Founded in 2004, it is a wholly owned subsidiary of Dubai Holdings (the private company owned by Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai). It is sometimes, and disparagingly in Al-Ansari's view, referred to as a "sovereign wealth fund". Disparaging, because as Al-Ansari emphasises, the Sheikh's commercial businesses are run according to Western standards of corporate governance.

"We formed DIC as a vehicle for deploying the excess cash-flow from Dubai Holdings in international investments. Up to that point, our investments were Dubai-centric, in property and infrastructure," he says. "The quickest way for us to join the private equity club was to invest in big funds like Carlyle and KKR, on the basis we would partner in deals." The strategy seems to be paying off.

Neatly categorising DIC, Al-Ansari agrees, is difficult. Not that he is complaining; he sees it as an advantage. With captive funding from Dubai Holdings, DIC "can act more flexibly than other private equity firms," Al-Ansari points out. "We're not under the same time pressure to invest and exit and therefore can take better advantage of market conditions."

He also acknowledges the value and power of relationships in sourcing and selecting deals: "Our key criterion in selecting opportunities is not necessarily sector or geography but the capability of the management team to deliver a return on the investment. His Highness is a shrewd and well-connected businessman and this has undoubtedly helped us in identifying opportunities." Which, he quickly adds, are subjected to rigorous commercial examination in the due diligence process.

Now 44, Al-Ansari was born in Kuwait and came to England at the age of 13 to complete his schooling. With a degree in financial management from Loughborough University, he started his career at the accountancy firm BDO, later moving to Ernst & Young, which gave him a posting in Dubai in 1987.

He rapidly found himself working with government clients and was engaged as chief financial officer at Dubai Aluminium Company as part of a turnaround team. "At the time, the company was generating around 10 per cent of Dubai's GDP (the same as oil). It was important to get it back on track," he says. Eight years on, keen to flex his entrepreneurial skills, he set up a corporate finance firm, which he ran for two years before joining the Sheikh's executive office as chief financial officer. Together with the Sheikh's senior advisers, he developed the blueprint for Dubai Holdings, founded in 2004. Nine months later, in October, DIC was formed.

Today the company employs around 60 people. Its board has an impressive line-up of non-executives. They include Sir Peter Bonfield, the former chief executive of BT, and Victor Chu, the executive chairman of the Chinese investment firm First Eastern Investment Group, who emerged last month as a potential partner to Richard Branson in his mooted Northern Rock bid.

But with ambitious growth targets come risks. And with so- called sovereign wealth funds said to have around $2.8 trillion at their disposal, how does Al-Ansari respond to reports that President George Bush is under pressure to rein in the activities of foreign investors? Does he anticipate problems in the US?

"As economies become more stressed, protectionists might come to the fore," he replies. "[But] my personal view is that it's a two-way street. Funds need to flow in both directions in a globalised economy. If corporate America wants to grow globally, you can't prevent foreign direct investment from coming in."

And what impact has the recent credit crunch had on DIC's ability to finance leveraged buy-outs? "Well, the market undoubtedly slowed or rather came to a halt in July, but we've had no problem with our banks, nor do we anticipate one. I think we'll start to see more realistic valuations as a result, potentially reducing debt requirements."

With Mr Chu among its non-executive directors, DIC certainly has the right contacts to be involved in a bid for Northern Rock. But there are several other bidders for the bank too. Will Dubai add a renamed Rock to its growing asset portfolio? Only time will tell.