Investment Corporation of Dubai (ICD), the emirate's sovereign wealth fund, has bought a stake in global hotel management firm Kerzner International from investors including the family of South African casino tycoon Sol Kerzner.
The deal gives Dubai, which depends heavily on its tourism industry, control of a second major luxury hotel firm. The first, Jumeirah, is owned by Dubai's ruler.
"This investment reaffirms ICD's commitment to support the long-term growth of our domestic hospitality market, a key pillar of and growth sector for the Dubai economy," ICD's chief executive Mohammed al-Shaibani said in a statement.
Kerzner International, originally founded by Sol Kerzner, manages the Atlantis and One & Only resort chains. Locations of its resorts range from South Africa to Mexico, but the firm has increasingly focused on Dubai in recent years.
ICD did not specify the size of the stake it had bought beyond saying it was "significant", or reveal the price paid. But a source aware of the matter said the stake was about 46 percent.
Istithmar World, a unit of state-owned conglomerate Dubai World, already owns 25 percent of Kerzner International. Shaibani will now take over as chairman of the company from Sol Kerzner.
After ICD's purchase, Istithmar and affiliates of Goldman Sachs and California-based Colony Capital will keep "significant holdings" in Kerzner International, ICD said.
Among other projects, Kerzner International and Istithmar built Dubai's iconic Atlantis resort on an artificial palm tree-shaped island in the Gulf. Debt problems then forced Kerzner into a USD$2.6 billion restructuring, and in April 2012, Istithmar bought out Kerzner's 50 percent stake in the property for USD$250 million.
Dubai is still working through debt problems of its own, and last year Istithmar sold the Atlantis Dubai resort to ICD for an undisclosed sum, as part of asset shuffles which are helping the emirate's state-linked firms meet loan repayments.