Dubai Financial Group’s (DFG) surprise move last week to raise its stake in Marfin Investment Group (MIG) to 19.9 percent and become its largest shareholder is creating an entirely new situation, with extensive ramifications on the Greek economy. DFG’s move has limited the broad dispersion of shares of MIG and Marfin Popular Bank (MPB), giving it control of key sectors, such as banks, telecommunications, food and healthcare. The move comes at a time of increasing concern internationally regarding the role and goals of state-sponsored investment schemes, the so-called sovereign funds. And while DFG may not be under the direct control of the Gulf emirate, it is nevertheless controlled by its emir. It may be worth recalling that a branch of the same group attempted to wrest control of US ports about two years ago, but failed after intervention by the US government. The Greek government also seems be monitoring developments and is reconsidering its stance toward MIG, particularly in connection with the latter’s acquisition of a 15 percent stake in OTE telecom. In a stock market filing on Friday, MIG said it directly held 10.61 percent of OTE shares and was exercising its right to buy an additional 4.4 percent via a total return equity swap. DFG’s increased stake in MIG also probably signals a change in its investment philosophy, as the powerful Arab group appears to be making low-key investment moves rather than aggressive ones. DFG is planning to acquire up to 30 percent of MPB, whose president, Andreas Vgenopoulos, will also head DFG’s Southeastern Europe subsidiary for five years. DFG announced that Vgenopoulos will lead the expansion of both MIG and MPB, but it is clear that this will be an interim phase as his responsibilities include the selection and supervision of his successors, who will take over after five years. Nevertheless, DFG’s acquisition of Vgenopoulos’s 2.5 percent stake in MPB has given rise to many rumors about his early exit from the group. But in a press briefing, Vgenopoulos downplayed the development, saying that he had never been a major shareholder in the group. MIG’s capital base currently stands at 11 billion euros and the group is able to borrow a further 4 billion. It has already invested about 4.1 billion euros in a number of Greek firms (Vivartia food group, OTE, the Attica shipping group and Hygeia hospital) and is looking for opportunities further afield in Europe. Group officials say that the major moves in Greece have been completed and new acquisitions will be in neighboring countries.