Maktoum Hasher Maktoum Al Maktoum Interview – The easy money maker – From the Archive
Posted by 7starsdubai on March 4, 2009
Sheikh Maktoum Hasher Maktoum bin Juma al Maktoum loves to win – on the racing track and in business, writes Andrew Cave
“If you invested 10pc down, say $300,000, in new-build properties and waited for them to be built and rented out, over five years the rent increased so much that if you sold them you could get profits of $10m,” he says at his family-owned Jumeirah Carlton Hotel in Knightsbridge.
Dubai has had the highest yield return for offices anywhere in the world, and it is still very high-yielding.”
Similar returns have apparently been available all over the tiny emirate state, according to Maktoum, a nephew of Dubai’s ruler, Sheikh Mohammed.
Large villas on The Palms, the controversial offshore development popular with Premiership footballers, could be bought for £630,000 six years ago, he says. They now fetch £2.5m.
“Anyone who bought there would have made a killing,” says Maktoum, who clearly did so himself. “I bought a couple,” he confirms, adding that his investment success helped increase his company’s value tenfold in four years.”
Maktoum, 30, who is dyslexic, seems to have found that grand prix racing cars are pretty profitable too, even if they did wreak collateral damage on his slender frame.
“I have broken every bone in my body except my spinal column motor racing, skiing, mountain biking: anything that involved danger,” he says.
At the age of 26, Maktoum set up A1 Grand Prix as a winter “world cup of motorsport” to rival Formula One, launching the venture in 2004 and selling out last year after a successful first year of competition. Hedge fund group RAB Capital bought 80pc of the venture for a reported £100m.
So how much money did he make?
Maktoum starts to look nervous. He’s apparently not allowed to say, as part of the contractual arrangements of the sale, but suggestions by a trade newspaper that he pocketed £5m profit look to be a bit light.
“I cannot say I did not make £5m,” he says eventually, “but had someone offered me that, I would not have taken it.”
“I achieved all my financial goals,” says Maktoum. “I had a very, very nice return on my investment. It was a project for me to prove myself; something for me to get my teeth into. And it has been a huge success.
“I sold it because I achieved my financial targets. It took me three years. It was a very challenging project but it has proved what I can do.
“A1 was a big risk. I planned the whole project myself.” Maktoum hadn’t lain idle before that. He helped his father run Al Fajer Group, one of the largest office contractors and developers in Dubai and was one of the founding investors in the first Virgin Megastore in the United Arab Emirates.
He also became a big personal investor in property. Now he plans to go into consumer electronics through his holding company DIHC.
So is he setting himself up as Dubai’s answer to Sir Alan Sugar?
Maktoum shrugs off the comparison but is hugely excited about the mass market product he is patenting. He thinks it can become very, very big. But does he really need to make even more money? He takes the question seriously. “When you achieve most of your dreams by the age of 30, you can become very introspective,” he says.
“The most important things in life are friends and family. I think you have to achieve a blend. You have to try to give something back. I don’t want to be the richest man in the human race. That’s not my game.”
Instead, he says he has been approached to help his state government in a fund management project and also has opportunities to get involved with hedge funds and to go on the board of a US private equity group.
Maktoum has the well-mannered poise of many of his oil-rich contemporaries. Still single, he is bashful about his private life and the delicate question of how much he is worth. He is predictably supportive of Dubai’s increasing involvement in western capital markets, such as Dubai Ports World’s £3.3bn takeover of Britain’s ports and ferries group P&O in 2005, and Dubai International Capital’s purchase of Tussauds Group.
He also applauds Sheikh Mohammed’s huge development of Dubai’s tourism industry to make up for the expected loss of oil revenues.
“It’s a very efficient way to move,” he says. “If you are the government, you want to make the economy efficient and generate less red tape.
“Sheikh Mohammed has seen the challenges ahead and is responding to them. He is a real visionary.
“There is still a lot of value being created in Dubai. Last year we had one of the biggest stock market crash anywhere in the world, with stock prices going down by 60pc to 70pc, but it is still a pretty rewarding place, which has had some of the best stock market growth anywhere in the world.
“Fifty years ago, Dubai was a little desert oasis. Dubai now is like the swinging 1920s in America. We have had a big crash. It is not to say that we will not have a big crash again, but there has been a lot of success as well.”
It’s easy to be sanguine about a financial crisis when you took sufficient precautions beforehand. Maktoum’s claim that he has a “gut instinct” for finance and markets seems to have been borne out by his actions this time.
“A month before the crash, I thought something was happening and sold a lot of my investments,” he says.
“Part of my success is that I am not greedy… You want to leave a party while it is still going on. You don’t want to leave at 3am. I want to leave something when it feels good.”
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