Istithmar moves into venture capital, debt investing

DUBAI Dec 11 (Reuters) - Dubai government-owned investment agency Istithmar will expand into venture capital and debt investing in the first half of 2008, its CEO David Jackson said on Tuesday.

Investors both domestically and abroad are seeking to buy up debt at low prices, in the expectation that the subprime mortgage meltdown and credit crunch in the U.S. and Europe are in their late stages.

This would be a departure from Istithmar's private equity style of investing, buying controlling stakes in companies and selling them later.

This year, the agency, a sister company of Dubai's DP World, has announced deals to invest in Djibouti's Daallo Airlines and to buy Jones Apparel Group Inc's (JNY.N) Barneys New York.

Venture capital investing has grown substantially in the United States in the last year, amid a boom in clean-technology and bio-tech start-ups returning to Silicon Valley after the technology bust in 2000. (Reporting by Michael Flaherty; Editing by Elizabeth Fullerton)