Reply #12: Dubai wealth fund buy-out head switches to Carlyle

[Demeter]

http://www.ft.com/cms/s/0/93fcaf32-40da-11df-94c2-00144feabdc0.html

Carlyle, the US-based private equity group, has poached Eric Kump, head of Dubai International Capital’s European private equity team, leaving the sovereign wealth fund with a troubled portfolio and lacking funds for new deals.

Mr Kump will on Tuesday be unveiled by Carlyle as a new managing director in its European buy-out team, only two years after the 39-year-old was hired by DIC from Merrill Lynch to bolster its London office.

The London Eye

DIC recently sold a stake in Merlin Entertainments, which operates the London Eye attraction

The move is a blow for DIC, which has not completed a new European buy-out for more than two years, focusing instead on defending the €1.8bn ($2.4bn) it has invested in six deals since it was founded in late 2004, many of which are struggling.

Dubai’s recent debt crisis has left DIC’s European team with limited resources for new deals from its owner, Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler.

DIC has a $1.25bn loan maturing in June.

DIC recently raised about £100m ($152.8m) by selling two-thirds of its 17 per cent stake in Merlin Entertainments to the family behind Lego, a fellow investor in the theme park group that operates the London Eye observation wheel and Legoland attractions.

After the sale, Mr Kump stepped down from the board of Merlin, the best performing asset in DIC’s European portfolio. Many of DIC’s European deals were done using high levels of debt before Mr Kump, or most of the team that will remain, joined the sovereign wealth fund.

The proceeds of the Merlin sale have been used to support other companies in DIC’s European portfolio. These include Travelodge, the UK hotel chain; Mauser, the German packaging business; and Doncasters, the UK engineering group.

Its latest battle is with Oaktree Capital, the US distressed debt and turnround investor, for control of Almatis, the German alumina producer. Mr Kump sat on the boards of Mauser, Travelodge and Alliance Medical, the UK diagnostics group.

DIC declined to comment.

The move underlines how Carlyle is feeling more optimistic about the climate for new European buy-outs, adding another senior executive in London ahead of an expected rush of deals. The US private equity group targets European companies worth €300m to €5bn.