Even the biggest boys on the block can feel like victims. For much of the past year, the multibillion-pound private equity firms have felt picked upon. Similarly, petrodollar funds now seem to think they are getting sand kicked in their face; they don’t like being called sovereign wealth funds.

The likes of Dubai International Capital (DIC) bristle if spoken of beside Chinese state-owned funds or Russian government-controlled corporations. DIC’s people insist that they have no ulterior strategic motives, just the profit motive, and that it is not state-owned, but a private business.

Their protests will fall on deaf ears in the West. Dubai Inc is, itself, a merger of business and government. Investments tend to be aligned with the State’s strategy. Claims that such companies as DIC are not state funds but private investment vehicles for the ruler, Sheikh Mohammed bin Rashid al-Maktoum, will not wash. There is not much difference between a sovereign wealth fund and the sovereign’s wealth fund.

The Gulf funds should not seek to rebrand, but reform. In the competition for Western assets, greater transparency will prove a competitive advantage. Concerns raised recently in the US Congress and by policymakers in Europe echo anxieties voiced about private equity firms and hedge funds. No one wants to deter sovereign funds from investing their billions in assets in the West, but governments, business and the public feel threatened by a lack of transparency. The question is: “Who are these guys?”

Dubai has a long, long way to go in terms of corporate transparency. The chairman of one of Dubai’s biggest investment funds would not even state the value of the funds he managed, let alone rates of return. (The only thing that made him more uncomfortable than an inquiry about the fund’s real financial performance was a question about whether he would consider doing business with Israel: he spluttered, joked that he was about to make off and marry a Jewish woman, muttered something about not asking stupid questions and then, composing himself, offered an elegant exposition of Dubai’s belief in tolerance of all-comers who seek to succeed in business.)

There are, however, signs of some progress. David McCormick, the US Treasury official in charge of international affairs, visited Dubai this week to try to make progress on the sovereign wealth fund issue. The United States does not want to be seen to deter Gulf investors, but, according to Dubai officials, Mr McCormick made clear that the political environment requires greater transparency. Dubai committed itself to working with the US on a code of practice for its investment funds.

Transparency may not come naturally, but, with the sense of fatalism that gripped the private equity industry, it seems that the Dubai authorities are just starting to answer the calls for greater openness.

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