Transcript of "The Richest Man In The Middle East"
Prince Al-Waleed’s Vast
• Both of Al-Waleed’s grandfathers were prominent world figures.
• His maternal grandfather, Riad Al Solh, was the first Prime Minister
• His paternal grandfather, Ibn Saud, was the man who founded Saudi
• Al-Waleed attended college in the United States, and gained exposure
to the Western way of life and its business practices.
• He earned his B.S. from Menlo College in 1979.
• He earned his M.S. from Syracuse University in 1985.
Going into Business
• After earnings his bachelor’s degree, Al-Waleed returned to Saudi
Arabia and quickly accumulated a small fortune by focusing on
construction contracts and real estate during the Saudi oil boom.
• He then moved on to acquire some smaller failing banks and turning
them around over a number of years.
Shrewd Stock Investments
By far the most important investment of Al-Waleed’s career came in 1991
when he made an investment in the predecessor of Citigroup (NYSE: C). The
company was suffering from failed investments in real-estate and Latin
According to Bloomberg, Al-Waleed paid a split-and-spinoff-adjusted price of
$2.98 per share. That’s a 1,500% return given the stock’s current price, and an
annual return of roughly 13% per year. And that’s without including
In 2008, during the worst days of the financial crisis, Al-Waleed upped his
stake to 5% of the company’s shares. Today, that stake would be worth $7.2
Diversification of Business
As Al-Waleed accumulated his vast wealth, he
formed Kingdom Holding Company. Under this
umbrella, he entered many industries, including:
• Hotels and Hotel Management
• Media and Entertainment
• Real Estate
Current Investments of Note
Besides Citigroup, Al-Waleed has many other current investments in U.S.
firms, though the amount of the investment can sometimes be difficult to
• The largest of those holdings is News Corp. (Nasdaq: NWSA), parent
company to Fox, Fox News, Fox Sports, and a host of international
media outlets. He is the second-largest voting shareholder in the
company behind the founding Murdoch family.
• The most notable of those recent investments was in Twitter (Nasdaq:
TWTR), in which he invested $300 million from early investors before
the company went public. This is typical of what seems to be his more
recent investment trends: fast-growing technology companies.
Why So Mad?
Despite all of this, Al-Waleed has gotten
the most press in the past two years for his
feud with Forbes.
• In 2013, Forbes estimated his net worth
at roughly $20 billion, which was $9.6
billion less than he said he was worth.
• Subsequently, Kingdom Holding
Company said that it had “severed all
ties” with Forbes—though the
publication continues to include him on
their list of the world’s richest people.
• Kingdom Holding also brought a libel
suit against Forbes in London.
So Who Is Right?
On One Hand
• Forbes claims that Al-Waleed sent representatives to their headquarters to
guarantee his rightful spot on the list, which is odd for such a frivolous list.
• Forbes isn’t the only media outlet to question Al-Waleed’s fortune, The
Economist voiced its doubts about the source of his income back in 1999.
• Forbes showed how stock of Kingdom Holding shot up an average of 41% in
the 10 weeks prior the “World’s Richest” list being published. This made
Forbes question the possibility of market manipulation.
So Who Is Right?
On the Other Hand
• Al-Waleed claims that he is more displeased with how Middle Eastern
business and the Saudi Arabian stock market in general is portrayed—rather
than his overall standing on Forbes’ list.
• Some of Al-Waleed’s former business partners claim that valuing a Saudia
Arabian business—or individual—is extremely difficult because of
differences in traditional Western markets and the Middle East.
• Specifically, they point to Al-Waleed’s vast real estate holdings in Saudi
Arabia as far more valuable than Forbes could have estimated.
In the end…
This definitely qualifies as a “billionaires-only” type problem.
The valuable takeaways remain that, like Warren Buffett, Al-Waleed has
invested in companies that are in a certain amount of distress, and has a much
longer holding period than most Wall Street professionals.
Unlike Buffett, Al-Waleed likes to focus on high-growth, cutting-edge
Warren Buffett's biggest
fear is about to come true
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