Istithmar CEO David Jackson '93 Speaks about the State of Private Equity
David Jackson’s job is just like that of any other private equity CEO. Jackson ’93 evaluates companies, he buys companies, and he generates profits. There are a couple differences, though. For one, as the CEO of Istithmar, his ultimate boss isn’t the chairman of the board but the government of Dubai, a tiny emirate near the tip of the Arabian Peninsula. Second, and possibly more important, since no hedge funds or mutual funds play a big role in the company, Jackson doesn’t feel pressured to show immediate returns. He can take the long-term view.
Jackson spoke to SOM students and faculty on Sept. 25 as part of the Leaders Forum. He discussed the state of private equity, which has seen its share of bumps in the last several months as the subprime mortgage crisis makes it more difficult to finance big deals. He has his eyes on a couple key upcoming benchmarks to judge just how bad the situation is. “We’ll really start to know how deep the problems are in March of next year when everyone has to repeat the previous year’s earnings and when the subprime mortgages reset,” he said. But he’s optimistic there will be many good opportunities going forward — for his firm in particular. “We see more value than we did six months ago,” he said.
Jackson joined Istithmar, the investment arm of Dubai World, in 2003 as the first chief investment officer. He was named CEO last year. Before that he spent nine years at Lehman Brothers, rising to the position of senior vice president. He left in 2002 to become a partner in Marco Polo Partners. At Istithmar, he oversees over $4 billion in investment in 30 companies. He was onboard for last year’s Dubai Ports World controversy, when the sister company’s attempt to take over terminal operations at six U.S. ports sparked a national scandal. “That’s six months of my life I’ll never get back,” Jackson said. This year’s purchase of high-end retailer Barneys has been easier. As CEO, Jackson said he concentrates Istithmar’s investment resources on four sectors: consumer, industry, financial resources, and real estate.
Listen to or watch David Jackson’s Leaders Forum talk.
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