Sameer al-Ansari, executive chairman and chief executive of Dubai International Capital, said at a business leaders conference in Dubai that he believes the world is heading into “a deep recession” that could last two to three years.

As a result, he said the fund would be “extremely conservative” and focus for now on protecting its existing US$12 billion in assets.

“Frankly speaking, I don’t want to invest right now,” al-Ansari said. “It’s not the time to be brave and go out there and try to hit the bottom of the market.”

As their financial systems crumble, Western political leaders and investors are increasingly looking to wealthy state-controlled funds for aid despite concerns about their relative lack of transparency. Senior U.S. and British officials courted the funds and the governments that run them during recent visits to the Gulf.

The oil-rich region’s funds injected much-needed cash into U.S. and European banks as the financial crisis started to unfold last year but have been largely quiet in recent months as the economic downturn worsened and the value of their foreign investments plummeted.

Finding the right balance could prove tricky. Leaders in the region are eager to protect growing domestic economies from financial turmoil elsewhere but understand they cannot fully insulate themselves from the downturn and the effect of tumbling energy prices.

“We cannot afford to see the Western financial system collapse,” said John Sfakianakis, chief economist at SABB, the HSBC Holdings PLC affiliate formerly known as Saudi British Bank. “It is in our national interest to see that the Western financial system is open and healthy.”

Al-Ansari said he expects investment opportunities in Europe and the U.S. will arise in the next year or year and a half, but for now his firm is focused on emerging markets such as China, India and the Middle East.

Separately, al-Ansari said he believed Dubai’s debt load is manageable, and he noted that as a ratio to gross domestic product it is far lower than that of Western countries such as the U.S., U.K. or Germany.

Some analysts have raised concerns the emirate could have trouble paying back its loans should the economy worsen.

Earlier this month, Cairo-based investment bank EFG Hermes estimated Dubai owes US$60.6 billion. Credit rating agency Moody’s Investors Service put Dubai state companies’ debt at US$47 billion.

Dubai International Capital is part of a holding company owned directly by Dubai’s ruler, Sheik Mohammed bin Rashid Al Maktoum. Its holdings include British hotel chain Travelodge and precision engineering company Doncasters Group.

Earlier this month, a senior official of a sister company, Dubai Group, told the AP he saw “fantastic opportunities” in the United States in the wake of the global financial crisis.

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