The Daily Circuit
👋 Hello from the Middle East!
Today in The Daily Circuit, we’re looking at Abu Dhabi’s $10 billion tourism investment plan, another quarterly drop in VC funding for the region’s startups, Saudi support for South Korean cybersecurity and Rolls-Royce sharpening its focus on the Middle East. But first, the Gulf’s gains in attracting foreign investment.
The UAE and Saudi Arabia made big jumps this year in an influential ranking of the world’s most desirable places for foreign investors to put their money. Kearney’s 2024 Foreign Direct Investment Confidence Index placed the UAE in eighth place globally and Saudi Arabia at No. 14, both rising 10 spots from 2023.
The ranking augurs well for Saudi Arabia in particular – Crown Prince Mohammed bin Salman has set an ambitious target to attract $100 billion in foreign investment within the next six years to pull off the massive economic transformation plans dubbed Vision 2030. Gaining traction with outside financiers is crucial as the Public Investment Fund is currently the largest backer of Saudi mega-projects spanning from NEOM to Downtown Riyadh. Despite progress, analysts remain skeptical the kingdom can hit its 2030 deadline and financing needs will continue to be met by the PIF, according to Bloomberg.
“It’s effectively still a public sector-led development model,” Monica Malik, chief economist at Abu Dhabi Commercial Bank, told Bloomberg in an interview. “At the moment they’re using all their pockets of strength for this transformation plan and I think going forward it will still be predominantly a Saudi-led development plan.” Growing cash needs at home will have knock-on effects to how the PIF chooses to spend abroad, analysts predict.
📰 Developing Stories
ROCKY VENTURE
Global venture capital investments fell to a near five-year low in the first three months of 2024, according to U.S. investment tracking firm PitchBook, as high interest rates continue to drag down funding and enthusiasm for AI props up activity in the VC space. Investors poured $75.9 billion in the January-to-March period, their lowest since the second quarter of 2019, according to Pitchbook. “We don’t expect deal activity to pick up in a meaningful way in the near term,” Kyle Stanford, lead venture capital analyst at PitchBook, told Reuters. The funding dip is mirrored in the MENA region as well, according to Wamda. While investment rebounded slightly in March, up 1% from the prior year, VC investment is down overall for the quarter by 62%.
CHECKING IN
Abu Dhabi plans to invest more than $10 billion in infrastructure and boost the number of hotel rooms in the emirate by more than 50% to 52,000 as part of its new tourism strategy, Mohamed Al Mubarak, Chairman of the Abu Dhabi Department of Culture and Tourism told The National. The strategy aims for 178,000 new jobs to be created in the emirate and will look to foreign investment to meet some of the required capital, Al Mubarak said. Among the attractions coming to Abu Dhabi are the Guggenheim Museum, the expansion of Warner Bros. World and the development of Harry Potter World within it.
💲 Sovereign Circuit
Public Investment Fund: Further details about a joint venture between Saudi Arabian Information Technology Company (SITE), a PIF-owned company, and South Korean information security solutions company AhnLab Inc. were revealed on Wednesday. The JV to deliver security solutions to public institutions and businesses in the kingdom will see SITE Ventures acquiring a 10% stake in AhnLab through a capital increase and a further $133 million invested into the Korean cybersecurity giant.
Qatar Investment Authority: The QIA and partner Dogus Holding sold a 42% stake in Istanbul’s IstinyePark luxury shopping mall to a Turkish property developer for about $500 million, Bloomberg reports.
Kuwait Investment Authority: KIA-backed Cale Street provided a $575 million loan for Chicago’s JMB Realty to start building its Century City office development in Los Angeles, The Real Deal reports.
↪↩ Closing Circuit
🤝 Pipeline Purchase: Lunate, an Abu Dhabi alternative asset manager owned by International Holding Co. and backed by ADQ, bought a 40% stake in Adnoc Oil Pipelines from BlackRock and KKR. Terms of the deal were not disclosed.
🛫JFK Revamp: Abu Dhabi-based Investcorp Capital said it will invest in the $4.2 billion redevelopment of Kennedy Airport in New York City, without disclosing the amount.
🏦 Signs of Stability: Doha Bank’s credit rating was raised from A- to A by Fitch, which said the move reflects increased confidence in Qatar’s future economic stability.
💳 Fintech Platform: Daleel, a Bahrain-based fintech startup, has secured investments from Hambro Perks Spring Studios, which is backed by Al Waha Fund of Funds, and Flat6Labs UAE.
🛞 Mobility Fund: Maniv, a venture capital firm based in Tel Aviv and New York, closed a $140 million fund whose investors include BNP Paribas Personal Finance and the venture arms of Shell and Enterprise Mobility, TechCrunch reports.
🏡 Hot Property: A 19-bedroom villa in Emirates Hills has sold for AED148 million ($40.2 million), making it the third most expensive villa sale in the emirate this year. Dubai Sotheby’s International Realty brokered the sale.
🗣 Circuit Chatter
📈 IPO Generator: Saudi Arabia’s latest string of startup IPOs is kindling investor interest in Middle East tech companies, Al-Monitor reports.
🛢️ Capacity Cuts: OPEC+ ministers kept oil output policy unchanged at an online meeting on Wednesday while pressing members to comply with voluntary cuts as crude prices reached their highest in five months at nearly $90 a barrel.
🤖 Geo Risk: By sharing specific concerns directly with the UAE over AI firm G42 and ties to China, “the White House and Congress were rewarded with tangible action on a key company’s ties to Beijing,” but more outreach is needed to international partners, according to an analysis by D.C. think tank The Washington Institute.
✨ Profit Plan: Rolls-Royce is putting the Middle East at the center of its five-year plan to quadruple profits, John Kelly, the luxury car and aerospace manufacturer’s president for the Middle East, Turkey and Africa, tells The National.🎥 Plot Thickens: Private-equity fund Apollo Global Management reportedly made a $26 billion offer to acquire all of Paramount Global this week but the entertainment giant is now in exclusive talks with Skydance, a production company led by David Ellison and backed by RedBird Capital, Tencent and KKR.
🌍 Power Circuit
Former U.S. President Donald Trump spoke on the phone recently with Saudi Crown Prince Mohammed bin Salman, The New York Times reports. Jake Sullivan, the White House National Security Adviser, postponed plans to travel to Saudi Arabia this week for talks with the prince because of a cracked rib.
UAE President Sheikh Mohamed bin Zayed bought a mansion in Chelsea for about $82 million in November, one of London’s most expensive home deals in recent years, Bloomberg reports.
Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council, hosted an Iftar banquet on Wednesday for Sheikh Hamdan bin Mohammed, Crown Prince of Dubai and Chairman of the Executive Council of Dubai, at Al Bateen Palace in Abu Dhabi.
➿ On the Circuit
Yasir Al-Rumayyan, Governor of Saudi Arabia’s Public Investment Fund and Chairman of Aramco, was ranked No. 1 in the Gulf Business 2024 list of the “100 Most Powerful Arabs.”
Dr. Sultan Al Jaber, Group CEO of Abu Dhabi National Oil Co. (Adnoc) and President of the COP28 climate conference, came in second, followed by Sheikh Ahmed bin Saeed, Chairman of Emirates Group.
Nabil Habayeb, the former President and CEO of GE International Markets, was appointed as an independent non-executive director at Dubai-based Immensa, a global dealer in spare parts for the energy industry.
🎶 Culture Circuit
🎶 Off Beat: Billboard Arabia has collaborated with scientists and sound engineers to transform topographic data from some of the Arab world’s most iconic landscapes into music. The Sounds of the Land initiative, produced by creative agency SRMG Labs, features music made using five locations: Al Ula in Saudi Arabia, Tafilah in Jordan, Tinghir in Morocco, Kadisha Valley in Lebanon, and Luxor in Egypt.
📷 Photo of The Day
📅 Circuit Calendar
Apr. 9, New York: The Information’s Private Capital Conference. An exclusive event for subscribers to join Founder and CEO Jessica Lessin and The Information’s reporters to discuss the future of technology and investing. New York Stock Exchange.
Apr. 16-17, Abu Dhabi, UAE. Green Hydrogen Summit 2024. Bringing together experts, policymakers, and industry leaders to explore opportunities and the industry’s future. Abu Dhabi National Exhibition Center.
Apr. 16-18, Abu Dhabi, UAE: World Future Energy Summit 2024. A platform to showcase the solutions to some of the most critical challenges identified at COP28. Abu Dhabi National Exhibition Center.
Apr. 16-18, Dubai, UAE. Middle East Energy. Energy leaders gather to debate and shape the future. Dubai World Trade Center.
Apr. 23-25, Dubai, UAE: GISEC Global. A forum for furthering the key discussions that are helping to define cyber resilience and connecting the global cybersecurity community. Dubai World Trade Center.
Apr. 25-26, Abu Dhabi, UAE: DriftX. An event for smart, autonomous and sustainable urban mobility across air, land, and sea organized in partnership with the Abu Dhabi Investment Office, Abu Dhabi’s Smart and Autonomous Vehicles Industry (SAVI) cluster and Bayanat. Yas Marina.
Apr. 28-29, Riyadh, Saudi Arabia: World Economic Forum Special Meeting. A gathering of investors, politicians and experts on topics of collaboration, growth and energy for economic development. TBC.
Apr. 29-May 1, Riyadh, Saudi Arabia: Future Hospitality Summit. An international gathering hosted in cities around the world bringing together the most influential hospitality investors and developers. Mandarin Oriental Al Faisaliah.
Apr. 29 – May 5, Abu Dhabi, UAE: Abu Dhabi International Book Fair. A key event for the publishing industry in the Middle East and North Africa. Abu Dhabi National Exhibition Center.
Apr. 30-May 1, Abu Dhabi, UAE: Mobility Live. A conference and exhibition sponsored by the Abu Dhabi transport regulators, gathering disruptive technology developers in transportation and the public sector. Abu Dhabi National Exhibition Center.
Apr. 30-May 1, Abu Dhabi, UAE: Middle East Rail. The leading conference in the region for rail innovation, technology and strategy. Abu Dhabi National Exhibition Center.
May 5-8, Los Angeles: Milken Institute Global Conference. Politicians, financiers, media and philanthropists convene to discuss challenges across themes like innovation and technology, health and medical research, diversity and inclusion. The Beverly Hilton.
May 13-15, Abu Dhabi, UAE: Abu Dhabi Global Healthcare Week. A conference focusing on investments, and innovation to solve the most important global health challenges. Abu Dhabi National Exhibition Center and Abu Dhabi City.
May. 14-16, Doha, Qatar: Qatar Economic Forum, Powered by Bloomberg. A news-driven event dedicated to global business and investment. This year’s theme is “A World Remade: Navigating the Year of Uncertainty.” Request your invite here. Fairmont & Raffles, Doha.
May 29-31, Marrakech, Morocco: GITEX Africa. The second edition of the biggest tech and startup gathering in Africa. Place Bab Jdid.