Interpreting Middle East Economic News and Analyzing Market Trends

Qatar courting Sarkozy to run PE fund

Qatar looking to setup a private equity fund to be run by former French President, Nicolas Sarkozy.  The fund is not yet setup and Sarkozy is still not sure if he will join the new venture.  What’s in it for Sawkozy?  Well, a lot of money for starters.  What’s in it for the Qataris?  More global branding and a star asset… among other things.  Here’s more from CNBC:

 

Nicolas Sarkozy is being wooed by sovereign wealth funds including Qatar’s who are ready to back him to start a private equity fund.

Qatar’s sovereign wealth fund and other investors have offered to commit as much as €500m in total to a fund run by the former French president, people familiar with the matter said. Mr Sarkozy has sought advice from close advisers on the plan.

However, he has put it on hold in recent weeks because he sees an opportunity to return to politics following the rapid decline in the polls of President Franois Hollande, who defeated him in May, two people familiar with Mr Sarkozy’s thinking said. “The Qataris are taking an option on the next president of France,” a third person with knowledge of the venture said.

Some in Mr Sarkozy’s close circle of business advisers and friends have urged him not to start a business that could hurt his political chances. Getting involved in a private equity venture could make a comeback difficult because of widespread public bias against finance in France.

Mr Hollande was elected last May after railing against finance on the campaign trail and pledging to tax those earning more than €1m a year at a 75 per cent marginal rate. “France isn’t the United States or the UK,” someone in his inner circle said.

But Mr Sarkozy, whose half-brother Olivier is a partner at the Washington-based buyout-group Carlyle, is keeping the private equity plan as an option he could revive if he decides to abandon politics once and for all, his advisers said. In particular, his wife, the top model-turned-pop-singer Carla Bruni-Sarkozy, is resisting a political comeback, they said.

Mr Sarkozy has consulted business friends for advice on how and where to invest the fund. One idea was to invest in companies in emerging markets such as Brazil, and another was to invest in Spain and Morocco.

Mr Sarkozy would not actually invest the funds himself. Instead, he would take a non-executive role, taking care of investors and opening doors and originating transactions through his political and business connections. The team would be based in Paris, the people said.

Read the full article from CNBC.

 

While there is no doubt Sarkozy would like to return to politics.  The real question is how realistic is it for him to return?  Two powerful forces are already against his return, first and foremost, his wife, Carla, does not want to return to politics.  This alone is enough to remove speculation that he will return.  Carla’s unhappiness with political life is no secret (read this from the Daily Mail).  The other force is France itself.  The economy is in a tailspin with no sign of a recovery.  Instead of being the core of the EU along with Germany, France is quickly looking like Italy.  The French distaste for Sarkozy and the way he ran the country is the main reason the French voted him out last year.  Why would they bring him back after such little time away?  (Read this for some recent news on the French economy)

 

It doesn’t seem likely that politics will be in Sarkozy’s future.  In the end, he will end up on the business side; it’s just a matter of Qatar agreeing to his price since this is what I believe is the real reason he put the idea on hold for now.