Dubai Holding increases stakes in Marfin bank and investment firm

Dubai Holding has made its second acquisition of a stake in an alternative investment firm this week, buying shares in Marfin Investment Group and Marfin Popular Bank.

Dubai Financial Group, owned by Dubai Holding through its Dubai Group arm, has increased its stake in Greek-listed investment firm Marfin Investment Group and in Marfin Popular Bank to 16 percent and 19.9 percent respectively for €612.1 million ($882.3 million) the Greek investment firm said in a statement.

The Dubai firm has spent €237.6 million for a 2.5 percent stake in the bank and €374.5 million for a 6.45 percent stake in Marfin Investment Group.

This is the second acquisition of a stake in an alternative investment firm's holding company in less than a week by a Dubai Holding unit.

Earlier this week, Dubai International Capital bought a 9.9 percent stake in Och-Ziff for $1.18 billion (€819 million) as the US hedge fund manager approaches an initial public offering.

The Dubai firm has acquired 53.5 million shares at €7 per share increasing its stake in Marfin Investment Group from 9.6 percent.

The Middle Eastern investor will acquire 19.8 million shares in the bank at €12 per share increasing its stake from 17.4 percent. It has also entered into an unrelated derivative structure in relation to 8 million shares of the bank.

Dubai Financial said in a statement it had acquired its original stake in the bank through €625 million worth of investments between May 2006 and December 2006.

Dubai Financial will also attempt to acquire over time 20 percent in Marfin Investment Group subject to market conditions and 30 percent in Marfin Popular Bank pending regulatory approval.

Andreas Vgenopolous is executive chairman of Marfin Investment Group and he will join Dubai Financial Group as the chairman of its subsidiary DFG South Eastern Europe for a period of five years.

Vgenopoulos has an executive role at both Marfin companies. The Greek investment group raised a €5.19 billion pool of capital in July from the public markets, becoming the world’s biggest listed private equity fund.

Dubai Holding is wholly owned by the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum. Dubai Holding contrasts its status with the Istithmar investment company, which is funded by the Dubai government.