Glassman’s article also mentioned another rather significant Middle East-Carlyle connection that had previously escaped the attention of the media. Back in 1990, a young Saudi prince was looking to invest $1bn in US stocks. His advisers were Carlyle, and they suggested he buy “a chunk” of the then-struggling Citicorp banking group.

The prince was Alwaleed bin Talal, who went on to become one of the world’s most high-profile investors – even though “his sums don’t add up”, according to a 1999 Economist article. Carlyle normally charges a 20% profit commission (known as a “carry”) on its private equity investments but in the case of Alwaleed’s acquisition of the Citicorp stake, Carlyle says it was paid on a fee basis.

Middle East investors often seem to be split into two camps: attention-seeking billionaires or publicity-shy state-owned funds. One of the few to break the mould is Dubai International Capital (DIC), founded in 2004. A shortlist of its private equity funds and co-investments reads like a who’s who of the private equity world: Carlyle, KKR, TPG, 3i and JPMorgan. As of the beginning of May, the list had not been updated to include Blackstone Group, to which DIC sold 80% of the Tussauds Group in March while retaining the remaining 20%.

Sameer Al Ansari, DIC’s executive chairman and CEO, estimated in a recent interview that investments in Western private equity funds by the government-owned investment vehicles of Abu Dhabi, Qatar and Dubai have reached $8bn– $10bn. He added that one of DIC’s first moves was to place about €295m with firms such as the Carlyle Group and Kohlberg Kravis Roberts. Investing in the funds was “the quickest and most efficient way to be part of the club”.

Government-owned Abu Dhabi Investment Company is reported to have invested around €75m in international private equity funds, but it is a minnow compared to its fellow state-owned investment vehicle, the secretive Abu Dhabi Investment Authority. This organisation has maybe €530bn in assets under management, a significant part of which is likely to be in private equity.

Other important government-owned investment vehicles that could be major backers of private equity funds include the Kuwait Investment Authority, Saudi Arabian Monetary Agency and Qatar Investment Authority.

After the US domestic opposition to government-owned Dubai Ports’ acquisition of P&O Ports, including its US operations, every Middle East investor will certainly be considering a public reaction to a direct bid. The giants of the private equity industry offer a convenient veil and absolute discretion. DIC is relatively open, but even it will not say exactly how many shares it has bought in UK-based banking group HSBC – the figure will be less than 3%, the ceiling at which anonymity is forfeited.

This is not the case for Maan Al-Sanea, the Kuwait-born Saudi who in April snapped up a
3.1% stake in HSBC for €4.8bn through a Cayman Islands vehicle, and is now the bank’s largest shareholder. Only a year ago, Arabian Business estimated Al-Sanea’s wealth at $1.4bn in its list of the world’s 50 richest Arabs. The 2007 Forbes List raised that to $7.5bn, however, ranking him 97th in the world. Nevertheless, Al-Sanea says that he has borrowed the money to buy the shares.

Like nearly every other Saudi-based billionaire, Al-Sanea is widely reported to have made his fortune in civil construction in the early 1980s although he says his wealth has accumulated over time from “many diversified sources in the Kingdom”. Al-Sanea also has funds invested with around 100 private equity outfits including quoted UK venture capital outfit 3i via his Geneva vehicle Saad Investments.

“We are very interested in expanding the private equity share of our portfolio”, says Herbert Stetzenmeyer, deputy general manager of Saad. The company, he says, has assets of more than €5bn, but “this is only the ‘offshore’ portfolio managed out of Geneva. The Group’s balance sheet is much larger.” 3i is one of the clearest examples of links with Middle East capital. CEO Phillip Yea joined the fund directly from Bahrain-based private equity firm Investcorp, where he was managing director between 1999 and 2004. Investcorp was one of the first private equity companies in the Gulf, established by the Iraqi Kurd Nemir Kirdar in 1982 before even Carlyle, TPG and Blackstone.