Dubai investment firm culls majority of team

Dubai's state-owned investment firm, Istithmar World, is believed to have chopped its investment functions to the bare bones - leaving only 10 people remaining from a team originally comprising 40 people.

The last six months have been tough for the firm, during which its high-profile investments such as stakes in US retailer Barneys and luxury cruiseliner the QE2 take a turn for the worse. It's therefore drastically cut its investment team by 75%, according to a report in Maktoob Business.

An insider told the publication: "To put it bluntly, there is no reason for being an investment company that does not have the means to invest."

Rather than rely on vast amounts of state capital, as is the case with most sovereign wealth funds, Istithmar World instead used credit for its investments, which has obviously caused problems recently.

"The merits of investing borrowed money are not proven," the source said. "But if you invest borrowed money, you should at least take care that the maturity of the liabilities matches the maturity of the assets."

The firm has not confirmed the redundancies, but if true, these follow on job cuts announced in January of this year.