Abu Dhabi's Mubadala in JV with Mesirow

DUBAI/NEW YORK Thu Feb 10, 2011 4:33pm EST

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DUBAI/NEW YORK (Reuters) - Abu Dhabi-owned investment fund Mubadala plans to set up a joint venture company with Chicago-based asset manager Mesirow Financial to offer risk management in commodity and currency markets, Mubadala said on Thursday.

The venture has hired Chris Coombe -- previously chief operating officer of Invest AD -- as its chief executive, a source familiar with the matter said.

Invest AD is owned by Abu Dhabi Investment Council (ADIC), which focuses on countries closer to home and is a separate entity from Abu Dhabi Investment Authority (ADIA), one of the world's largest sovereign wealth funds.

The new joint venture company, to be based in oil-rich Abu Dhabi, will need to obtain regulatory approvals and licenses to begin operations, Mubadala said in a statement.

Mubadala will own 51 percent of the joint venture and Mesirow will own the remaining 49 percent stake, Mesirow spokeswoman Katie Schimmel told Reuters on Thursday. The venture is a completely new entity and has not yet been named, she said.

Mubadala has previously picked up stakes in companies with which it forms joint ventures, but it has not done so with Mesirow, Schimmel said.

No financial details of the joint venture were provided in the statement.

The new company will specialize in advising and managing commodity portfolios focusing on absolute return strategies and in the medium-term offer multi-strategy investment solutions for institutional investors, the statement said.

It plans to cater to clients in Abu Dhabi and in Middle East, North Africa and South Asia region, the statement said.

"This new venture will help clients navigate market fluctuations and manage downside risks - particularly in commodity and currency prices," Waleed Al Mokarrab Al Muhairi, Chief Operating Officer for Mubadala, said in the statement.

STAKE OWNER

Mubadala has stakes in Advanced Micro Devices Inc (AMD.N) and Ferrari, as well as General Electric (GE.N) and private equity firm Carlyle.

It had total assets under management of 86.1 billion dirhams ($23.4 billion) as at June 30, 2010.

Mesirow is a diversified financial services firm which manages assets and is one of the largest broker-dealers for institutions and financial entities. It has assets under management of over $25 billion across currency and commodities markets.

Longtime Mesirow Chairman and Chief Executive James Tyree led a group of Chicago investors in a successful 2009 bid to take over the Sun-Times Media Group, publisher of the flagship Chicago Sun-Times newspaper. He was diagnosed with cancer in October but told employees last month that it was shrinking in response to treatment, according to media reports.

Mubadala is fully owned by the Abu Dhabi government. Abu Dhabi, capital of the United Arab Emirates is investing heavily in sectors such as industry, tourism, infrastructure and real estate to diversify its economy from oil.

Along with its international holdings, Mubadala also owns stakes in local firms including UAE telecom operator Du DU.DU and developer Aldar Properties ALDR.AD.

Mubadala posted a first-half loss of $1.12 billion in September driven by the falling value of stakes it has in other companies.

(Reporting by Dinesh Nair in Dubai and Maria Aspan in New York; Editing by Reed Stevenson and Matthew Lewis)

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