Bahrain sets pace as McLaren seeks car funds

Talal al-Zain, the chief executive of Mumtalakat, said that he wanted to back McLaren Automotive despite the turmoil in the car industry.

The Bahraini investment fund already owns 30 per cent of the McLaren racing team and it wants to raise its input in the company, which is based in Woking, Surrey, to help to fund the development of the road cars.

Mr al-Zain said: “This is a risk we are willing to take. If they succeed in launching this range of sports cars, it will be a fantastic opportunity for us. We believe in the project and if we have a chance to invest and the proposal makes sense, it will be good for us to do it. We are expressing our very strong interest.”

The support of a leading Gulf investor will be a boost to Mr Dennis and McLaren Automotive as they seek funds amid one of the worst crises to hit the car industry. Car sales in the UK fell 30.5 per cent last month and British car manufacturers have been forced to shut factories and reduce capacity to cope with the downturn.

Mr al-Zain said: “These are bad times, but it would be crazy for us to say there is a downturn now so let’s not do anything. I want a product ready for when growth and wealth return so we can benefit from that.”

Mumtalakat is the holding vehicle for a number of companies based in Bahrain. Its assets include Alba, the aluminium producer, Gulf Air and the Bahrain International Circuit, which hosted yesterday’s Bahrain Grand Prix.

The company has 98 per cent of its assets in Bahrain and the Gulf region and wants to diversify geographically to reduce risk. Its long-term aim is to have half its investments outside Bahrain.

Mr al-Zain said that he was interested in buying minority stakes in companies in sectors such as telecoms, leisure and tourism, financial services and renewable energy.

In financial services he is looking for niche providers such as real estate asset managers and hedge funds, rather than copying other Gulf investors that have bought large stakes in Western banks.

Mr al-Zain said that he was looking in particular for opportunities that could help to strengthen companies that are already within the Mumtalakat portfolio.

“In the current crisis I have to ask: are there investments I can make that strengthen and grow our existing companies? Because we know these businesses, so the risk in buying something similar is lower.”

He added that he was interested in bringing in strategic partners to help to develop the Bahraini companies within Mumtalakat’s portfolio. This could be done by selling minority stakes and could lead to the eventual privatisation of these companies.

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