The Richest Man In The Middle East


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Saudi Arabia's Prince Al-Waleed is the Middle East's richest man. So what's made him so unhappy?

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The Richest Man In The Middle East

  1. 1. Prince Al-Waleed’s Vast Fortune
  2. 2. Prominent Lineage • Both of Al-Waleed’s grandfathers were prominent world figures. • His maternal grandfather, Riad Al Solh, was the first Prime Minister of Lebanon. • His paternal grandfather, Ibn Saud, was the man who founded Saudi Arabia • 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.
  3. 3. 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.
  4. 4. 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 America. 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 dividends! 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 billion.
  5. 5. 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 • Agriculture • Petrochemicals • Aviation • Technology • Real Estate
  6. 6. 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 discern. • 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.
  7. 7. 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.
  8. 8. 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. .
  9. 9. 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. .
  10. 10. 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 technology companies. .
  11. 11. Warren Buffett's biggest fear is about to come true