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Rothschild’s roadmap for Dubai’s economic recovery
It is payback time for Rothschild in Dubai. The 200-year-old banking house, perhaps the bluest of the blue bloods of the world’s financial dynasties, has always prided itself on the strength of its relationships, especially with governments and global power brokers.
Now, after years of cultivating Dubai corporations with advice and assistance, it has landed the big one – the brief to advise Dubai Inc on the strategy for recovery from the financial crisis. Last month it was announced that Rothschild’s Dubai office had been retained by the Government’s Department of Finance to advise on the US$10 billion (Dh36.7bn) financial support fund (FSF) raised by Dubai on the bond markets (with a further $10bn in the pipeline).
When it came to it, Dubai – with a portfolio of borrowing relationships with most of the world’s big banking groups – had only two real alternatives: Rothschild, or its great rival, Lazard. As the financial crisis has thinned the ranks of the old-fashioned merchant banks, only those two were in a position to offer Dubai the kind of independent, objective advice it needed. Its final choice was recognition of Rothschild’s commitment to the emirate and the strength of its reputation as a financial problem solver.
No doubt Nasser al Shaikh, the director general of the Department of Finance, who was personally involved in the selection process, was also impressed by Rothschild’s current involvement in the restructuring of the troubled US motor industry, as well as its role as adviser to European governments tackling the fallout of the financial crisis.
Since it was appointed, Rothschild has maintained a low profile on the details of its brief. It has been quietly putting in place the ground rules and structures that will govern the day-to-day administration of the FSF. But details are beginning to emerge among informed sources in the Dubai financial community, and – although its strategy is still being finalised – elements of it are beginning to clarify as the disbursement of the first $10bn tranche gets under way.
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Now, after years of cultivating Dubai corporations with advice and assistance, it has landed the big one – the brief to advise Dubai Inc on the strategy for recovery from the financial crisis. Last month it was announced that Rothschild’s Dubai office had been retained by the Government’s Department of Finance to advise on the US$10 billion (Dh36.7bn) financial support fund (FSF) raised by Dubai on the bond markets (with a further $10bn in the pipeline).
When it came to it, Dubai – with a portfolio of borrowing relationships with most of the world’s big banking groups – had only two real alternatives: Rothschild, or its great rival, Lazard. As the financial crisis has thinned the ranks of the old-fashioned merchant banks, only those two were in a position to offer Dubai the kind of independent, objective advice it needed. Its final choice was recognition of Rothschild’s commitment to the emirate and the strength of its reputation as a financial problem solver.
No doubt Nasser al Shaikh, the director general of the Department of Finance, who was personally involved in the selection process, was also impressed by Rothschild’s current involvement in the restructuring of the troubled US motor industry, as well as its role as adviser to European governments tackling the fallout of the financial crisis.
Since it was appointed, Rothschild has maintained a low profile on the details of its brief. It has been quietly putting in place the ground rules and structures that will govern the day-to-day administration of the FSF. But details are beginning to emerge among informed sources in the Dubai financial community, and – although its strategy is still being finalised – elements of it are beginning to clarify as the disbursement of the first $10bn tranche gets under way.
.
.
.
.
.
.