The Dubai Government has purchased the Bahrain unit of PWS
The Bahrain unit of London-based broker PWS Holdings has been acquired by a firm owned by the Dubai government for an undisclosed sum.
The acquisition was made by broker Insure Direct, which is owned by Istithmar World, Dubai’s sovereign wealth fund. In a statement the company said it bought the office, portfolio and insurance licence of PWS International, Bahrain, to strengthen its presence in the Middle East.
Chief executive Kenneth George Maw said: “The acquisition of the Bahrain business will help strengthen our position in the Middle East and give us the opportunity to deliver services in insurance and reinsurance sectors in the northern Gulf, Saudi Arabia, Jordan, Iraq, Syria and Lebanon.”
Istithmar World also has additional expansions plans for Europe, the US and Asia following its acquisition of Insure Direct in 2006.
The acquisition was a strategic move by Istithmar World to invest in the insurance sector.
The acquisition marks a wider trend in the growth of sovereign wealth funds –state-owned funds composed of financial assets such as stocks, bonds, property or other financial instruments.
According to new research conducted by think tank International Financial Services London, sovereign wealth funds increased by 18% last year. The funds are being used for active investment strategies such as mergers and acquisitions or purchasing minority stakes.
The research said the increase is partly attributed to the credit crunch and the need for capital injections by banks.
The think tank said that more than three-quarters of cross-border acquisitions last year were in the financial services sector. It added that the sovereign investment vehicles, which included state-owned corporations, controlled about £3bn in assets.
In January the THB Group aquired the broking division of PWS International for £8.5m in cash and loan notes. PWS draws in business mainly from Asia, Latin America and the Middle East.