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David Jackson ’93MBASpeaking at the School of Management Leaders Forum in September 2007, David Jackson ’93MBA noted that the subprime mortgage crisis was troubling many private equity firms, but “not necessarily” his. “Thanks to all of you, oil goes to $80,” said the SOM grad and CEO of Istithmar World Capital, which is owned by the government of Dubai. “I don’t really worry about where I am going to get the money for my next deal.” Right about now, Jackson is probably worried. Since the SOM speech, Istithmar’s investments ballooned from $4 billion to nearly $20 billion—some $17 billion of it borrowed—according to the Wall Street Journal, which calls the firm “a symbol of Dubai’s once-grand—and now flagging—ambitions.” The Middle Eastern emirate rattled global investors late last month by announcing it wanted a six-month break from payments on an estimated $80 billion in debt. The debt is owed by Dubai World, the government-owned fund of which Istithmar is part. Under Jackson, the private equity arm bought up such name-brand properties as Barneys New York, Cirque du Soleil, and a string of upscale hotels, including the Fontainebleau in Miami and the Mandarin Oriental in Manhattan. Another New York prize, the W Hotel Union Square—for which Jackson paid $285 million—slipped from his grasp this week after Istithmar defaulted on its payments.
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