James Caan is probably best known for appearing on the UK television programme Dragons' Den, where he invested more than £1 million (Dh5.7m) in 14 companies. Mr Caan, who is chairman of 90 North Real Estate Partners, talks about expanding his investment advisory firm into the UAE and why he left the TV show.
q&a
q 90 North, which is opening in Dubai, will advise people who want to invest in property in a Sharia-compliant way. Why did you think that was important?
a As a result of the credit crisis, the general appetite for Sharia-compliant investments is a growing market. I see far more interest in the region of people looking at being more conscious. They want to place their capital in an environment that meets their religious requirement. One question is if the global economy would have followed Sharia-compliant [principles] would we have had a credit crisis?
q And what do you think?
a I think we would have been able to avoid a credit crisis. If you look at hedge funds around the world, short-selling is one of the biggest factors for turmoil in markets. The principle of Sharia law is you can't sell something you don't own. Giving people mortgages at interest rates that are uncapped is a fundamental principle that Sharia law doesn't accept.
q Your firm will be establishing partnerships in the Gulf to find property investment opportunities for clients. But given the local property climate, and global economic uncertainty, is this not quite risky?
a I think it's a real good point, and we are very sensitive to identifying [the right] situation. We're looking at real estate opportunities that are very sector-sensitive. One of the issues for us is understanding how to manage risk. If you're just looking for conventional real estate such as the health club sector, that market is quite challenged right now. Right now, my outlook on retail is not very strong because online impact of retailers is quite significant.
q So which opportunities have you identified?
a We've identified student housing, because global demand for education from Asia, Middle East, India and into the UK is set to grow. Currently we don't have enough supply of student accommodations to satisfy needs. Therefore, over 10 years, we see it growing and I think it's a defensive sector to be in. We typically see about £1 billion of real estate every month, which we reject, simply because they don't meet our underlying criteria of how we manage risk.
q You have taken a lot of risk while investing in companies during your four seasons on Dragons' Den. Why did you leave the show?
a The only reason I stepped down was because I literally made so many investments. I didn't want to become a deal junkie. Every entrepreneur wants to spend time with you on their investment and demand time. I thought, 'how many deals can you do where you still maintain the quality with the entrepreneur?' It's not just capital they want. They want a piece of you and your time.