Sept. 11 (Bloomberg) -- Istithmar World, the Dubai sovereign wealth fund, is halting investments as part of a restructuring effort after spending more than $25 billion this decade on stakes ranging from a yacht marina to luxury retailer Barneys New York, according to people familiar with the plan.

The reorganization may result in a sale of the fund or its assets, they said. Istithmar, run by David Jackson, said this week that co-chief investment officers John Amato and Felix Herlihy are leaving the firm. Jackson’s job is under review as well, the people said.

Istithmar and its parent, Dubai World, have struggled this year on investments, including Barneys, which may be facing a restructuring or bankruptcy according to people familiar with the retailer, and CityCenter, an $11 billion project in Las Vegas. Abu Dhabi, the wealthiest member of the United Arab Emirates, provided a $10 billion bailout this year for Dubai as the emirate struggled to meet payments on $80 billion of debt used to finance real-estate projects.

“They need to decide whether to keep Istithmar as a sovereign wealth fund or to clip its wings, roll it up and have it cease to exist independently,” said Victoria Barbary, a senior analyst at Monitor Group in London. “With Dubai World’s broader problems, it would not be surprising if Istithmar was rolled up.”

Winding down Istithmar may help Dubai reduce its debt load, the people said.

“There are no plans to merge IW,” Abdelaziz Al Mazam, head of marketing and public relations at Istithmar World, said in an e-mail. “IW is one of Dubai World’s key subsidiaries, actively managing a portfolio of investments worldwide, and will continue to be a key subsidiary into the future.”

Among Istithmar’s investments this decade was Yacht Haven Grande, a marina complex in the Caribbean, the W Hotel Union Square in New York and GLG Partners Inc., a hedge fund that has lost more than 61 percent of its value since the deal was announced in June 2007.

“Istithmar is in serious trouble,” said Rochdi Younsi, head of Middle East research at New York-based Eurasia Group. “At Istithmar there’s a feeling that jobs aren’t secure and it wouldn’t be a surprise if the firm just disappeared.”

To contact the reporters on this story: Jonathan Keehner in New York at jkeehner@bloomberg.net; Serena Saitto in New York at ssaitto@bloomberg.net;

Last Updated: September 10, 2009 20:02 EDT