Canadian pension fund makes $2.5bn bet on Dubai Ports

Canadian pension fund makes $2.5bn bet on Dubai Ports

One of Canada’s largest pension funds will plough $2.5bn into Dubai port operator DP World, marking the first direct foreign investment in the Gulf emirate’s state-owned logistics giant.

Caisse de dépôt et placement du Québec (CDPQ) is investing the sum in Jebel Ali Port, Jebel Ali Free Zone and the National Industries Park, three of DP World’s key domestic assets.

As part of the deal announced on Monday, CDPQ will take a roughly 22 per cent stake in a new joint venture with DP World.

Dubai’s emergence as a global business hub has its roots in trade, starting out as a small entrepôt in the early 20th century before expanding into an aviation, tourism and services hub. The Jebel Ali facilities account for almost a quarter of the emirate’s economy.

The economy of the city-state has emerged strongly out of the pandemic, attracting new residents and companies thanks to its success in controlling the virus while keeping its economy open. The war in Ukraine has triggered another surge of new Russian entrants seeking a financial haven.

The government, alongside the oil-rich capital of the United Arab Emirates, Abu Dhabi, is also opening state-owned companies up to foreign investment. Dubai has launched a series of privatisations,