Operating Model
Investments take place at two levels:
- At the portfolio company level
– Portfolio companies typically grow organically or through acquisitions according to their own respective strategy. - At the DIF parent level
-DIF supports the development of strategic portfolio companies and may provide investment capital to fund growth initiatives, as appropriate;
-DIF also carries out its own investment activities, with a focus on portfolio diversification through allocation of capital across asset classes, sectors and key geographies, in partnership with external fund managers, as discussed in the Investment Strategy section
Funding also takes place at two levels:
- At the portfolio company level
Portfolio companies typically have direct access to a variety of funding sources and commonly fund their expansion plans from a combination of available cash and cash equivalent, cash flow from operations, and bank and capital markets debt financings, as appropriate. DIF may also provide capital to portfolio companies when justified by strategic and financial considerations. Portfolio companies monitor and manage conservatively their leverage consistent with appropriate investment, risk and governance frameworks. - At the DIF parent level
– DIF parent is self-funding and does not typically receive funding or seek support from the Government of Dubai. DIF parent occasionally receives non-monetary contributions from the Government of Dubai such as ownership interests in companies;
-DIF’s principal sources of income are regular dividends and occasional special distributions received from its portfolio companies, net proceeds from the sale of controlled assets and businesses, distributions from funds, net proceeds from the sale of co-investments, and income from credit instruments and yielding securities; and
– DIF also, from time to time, may solicit third party funding to support its activities. DIF monitors and manages this leverage conservatively through objectives set within DIF’s treasury, investment, risk and governance frameworks.
Return to our shareholder, the Government
- DIF makes distributions to the Government of Dubai dependent on the dividends it receives from its portfolio companies and on future growth plans and investment plans.