ADIC, a Government-owned investment and asset management firm, agrees to buy a stake in a Russian ski resort.
ADIC buys into Russian ski resort
The Abu Dhabi Investment Company (ADIC), a Government-owned investment bank and asset management firm, has agreed to buy a stake in a Russian ski resort that will host events during the 2014 Winter Olympics, the company said yesterday. ADIC would not reveal the size of its stake in the resort, called Gornaya Karusel, but said the intent was to help foster investment flows between the Middle East and North Africa (Mena) region and the rest of the world.
The company also signed a co-operation agreement yesterday with the Korea Development Bank and the Korea Trade Promotion Agency aimed at the same objective of tightening economic ties. The Gornaya Karusel resort is to host ski jumping events at the 2014 Olympics, which in 2007 were awarded to Sochi, a vacation spot on the Black Sea in Russia's southern region, nestled in the Caucasus mountain range that separates the country from Georgia.
"Abu Dhabi Investment Company hopes to play an important role in the development of the project, in particular by introducing selected additional investors from the Mena region or those with significant experience of developing Olympic Games infrastructure," its chief executive, Nazem Fawwaz al Kudsi, said yesterday. In the lead-up to the games, which the Russian government hopes to finance largely through private partnerships instead of with state money, millions of dirhams are being spent on upgrading existing facilities and developing new ones.
Once work is done at Gornaya Karusel, it will include 200km of ski slopes, 28 cable lift stations, luxury chalets, apartments, restaurants, sports complexes and a spa, according to an ADIC statement. Upon completion, the resort will be large enough for 50,000 skiiers and will have a total of 20,000 beds. For ADIC, the investment represents a departure from the pattern of expansion it has established since Mr al Kudsi became chief executive last summer.
It is heavily involved in regional businesses through its private equity funds, which own majority stakes in companies in the UAE, Egypt and elsewhere. It has also moved aggressively to develop itself as a major investment banking and asset management firm in the region, announcing the launch of new funds and hiring seasoned professionals from top western firms, including the American investment bank Goldman Sachs and the London-based banking powerhouse Rothschild.
Until now, however, the firm has largely stayed away from putting its own proprietary money into big foreign investments; those deals have been the province of the Abu Dhabi Investment Council, which owns ADIC. The council, for example, last year bought a 75 per cent stake in the iconic Chrysler building in New York City for a reported US$800 million (Dh2.9bn). The investment in Gornaya Karusel marks ADIC's first foray into Russia. It is joined in the deal by the government of Sochi, the government of the Krasnodar region where Sochi is located, and Sberbank Rossii, Russia's largest bank, which has a 25.01 per cent stake. ADIC made the announcement during an economic forum that ends today in St Petersburg.
"This is a wonderful opportunity for investing in Russia, in an event of as much international significance as the Olympic Games, as well as into a region of immense appeal to visitors and sports people alike," said Omar Ghobash, the UAE's ambassador to Russia. email@example.com