Saudi investment king who no longer rules alone: Reuters

By Al Mayadeen English
Source: Agencies
15 Jun 2022 19:22
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Saudi wealth fund bought nearly 17% of Prince Alwaleed's firm for $1.5 billion.

Saudi investment king who no longer rules alone.

The prince, who is the international face of Saudi business, may no longer have complete control.

For years, Saudi Arabia's Prince Alwaleed bin Talal has made hundreds of millions of dollars by investing in companies ranging from Citigroup to Uber and Twitter with almost complete autonomy.

According to sources familiar with the matter, his Kingdom Holding investment firm now has Saudi Arabia's Public Investment Fund (PIF) as a minority shareholder, and the powerful sovereign wealth fund is unlikely to sit on the sidelines.

Two sources familiar with the Kingdom's business told Reuters that the wealth fund, which is at the heart of Crown Prince Mohammed bin Salman's plan to diversify the Saudi economy, will want Kingdom Holding's investment committee to be more powerful in terms of making decisions than before.

"(PIF) will want to be an active investor," said a sovereign wealth fund investor in the Gulf. "The investment committee of Kingdom Holding is essentially Alwaleed, and I can't imagine the PIF being at the whims of the prince."

When contacted by Reuters, the PIF, Kingdom Holding, Prince Alwaleed, and his spokesperson all declined to comment on what the PIF's minority stake means for future investments.

Alwaleed, 67, had long held a tight grip on the Kingdom's shares, owning all but 5% of those traded on the Saudi stock exchange until PIF paid $1.5 billion for a 16.87 percent stake last month.

The agreement came more than four years after Prince Alwaleed was arrested in a crackdown ordered by the Crown Prince and held for nearly three months at Riyadh's Ritz-Carlton along with scores of royals, senior officials, and business leaders.

Most detainees were released after so-called "financial settlements were reached," and Prince Alwaleed announced in March 2018 that he had reached a confidential deal with the government.

The PIF agreement was reached at Kingdom Holding's lowest share price of the year, with no premium. Bankers who typically work with the PIF or Alwaleed were not hired for this transaction, according to two sources familiar with the situation.

'Change of tack'

As part of the settlements securing their release, the Saudi state took direct controlling stakes in the businesses of some Saudi entrepreneurs detained in 2017, including the Binladen construction group and the media company MBC.

Alwaleed rose to international prominence in the 1990s after making a large successful bet on Citigroup, and he was an early investor in Apple.

A $300 million joint investment in Twitter was made by the prince and Kingdom in 2011, and his stake was increased in 2015. He agreed last month to roll a stake now worth $1.89 billion into Elon Musk's takeover deal rather than cash out.