The Daily Circuit
👋 Hello from the Middle East!
Today in the Daily Circuit, we’re looking at Qatar’s plans to expand its gas industry, increased trade between the UAE and China, the closing of Mubadala’s acquisition of Fortress Investment Group and the slimming down of the Saudi Public Investment Fund’s U.S. equities portfolio. But first, venture capitalists in Qatar say the more things change, the more they remain the same.
The state of the venture capital market — and how it is being reshaped by artificial intelligence — was top of the agenda on the final day of the Qatar Economic Forum in Doha today, with partners from Global Ventures, Golden Gate Ventures and Alpha Wave Global sounding off on a panel. “Our founders, they’ve struggled the same amount they’ve always struggled,” Noor Sweid, Co-Founder and Managing Partner of Global Ventures, said with a laugh.
The Dubai venture capitalist was commenting on the state of venture funding that has seen deal activity and check sizes plunge globally, as she emphasized that the region’s start-ups — for whom she is a vocal champion — are no strangers to dealing with challenges. Startups tend to be cash flow positive faster and demonstrate good business fundamentals because they are used to being in a cash-constrained funding environment, Sweid said.
She also noted a trend toward Global Ventures’ portfolio companies pivoting to integrate AI tools, adding that of the more than 60 startups the six-year-old Dubai VC has backed, 40% of them could be considered AI firms today.
Golden Gate Ventures Founder Vinnie Lauria, speaking alongside Sweid, said the Singaporean fund is eyeing B2B AI investments and said there is a strengthening corridor between his portfolio companies from Southeast Asia and the Gulf, as they find a foothold in cities like Abu Dhabi and Riyadh to access the regional market.
Golden Gate, founded by Silicon Valley natives, announced its first $100 million MENA fund on Wednesday with $20 million in commitments from Al Khor Holding, Al Attiya Group and Sheikh Jassim Bin Jabor Al Thani.
Rick Gerson, Co-Founder and Chairman of U.S. asset manager Alpha Wave Global, noted the $1.5 billion Microsoft investment in Abu Dhabi AI firm G42 as the “first large-scale demonstration of AI’s success in the region.” In 2022, the Miami Beach-based firm took on the co-management of a $10 billion VC fund with Abu Dhabi’s Chimera Capital. Gerson also noted the significant amount of exposure Alpha Wave has in India, adding that the Middle East represents a massive, largely untapped opportunity for the firm’s portfolio.
On a panel at the Qatar conference about investing in sports, Gerry Cardinale, Founder, Managing Partner & Chief Investment Officer of RedBird Capital Partners, said skyrocketing prices have created a “bubble” in the market for professional teams.
Cardinale, owner of Italy’s AC Milan, said institutional investors are getting deeper into sports because teams are “phenomenal pieces of intellectual property that are intrinsically extremely valuable.” Within the sports market, Cardinale said, “I think there’s a lot of creative investing that can be done… around the monetization of the intellectual property that those teams, or leagues, represent.”
📰 Developing Stories
GASSING UP
Qatar expects demand for liquified natural gas to keep growing and sees little prospect of a growing glut in coming years. Speaking at the Qatar Investment Forum in Doha on Wednesday, Energy Minister Saad Al-Kaabi said his country will press on with its multibillion-dollar expansion of liquified natural gas facilities, and may consider adding further capacity if more gas becomes available, Bloomberg reports. “If we have a reasonable economic growth going forward, I think you’ll see all that supply and demand will catch up and you’ll need another phase of development of gas in the 2030s,” he said. “I don’t think gas is going away anytime soon.” Qatar is boosting its LNG capacity to 126 million tons a year by 2027 from 77 million a year currently. It’s targeting 142 million tons a year by the end of the decade.
CHINA TRADE
Amid new U.S. trade sanctions aimed at China, the UAE has become a welcoming home for Chinese investments in the Middle East. Those investments increased more than 16% last year to $1.3 billion, Zhang Yiming, China’s ambassador to the UAE, told the China-Arab Entrepreneurs Summit in Abu Dhabi on Wednesday. They also accounted for 60% of China’s total investment in Arab countries. At the same time, the UAE boosted its investments in China by 120% last year, the ambassador said. Elsewhere in the Gulf, Saudi Arabia’s historic desert city of AlUla signed a preliminary agreement with Huawei’s Petal Ads to help promote the landmark tourism site in China. Last month, Bahrain-based Investcorp Holdings, the Middle East’s biggest alternative asset manager, announced that it will launch a $1 billion fund anchored by China’s sovereign wealth fund, China Investment Corp.
💲 Sovereign Circuit
Public Investment Fund: Saudi Arabia’s sovereign wealth fund reduced the number of U.S. stocks it reported owning at the end of the first quarter, roughly halving its direct holdings in those equities to $18 billion, Bloomberg reported, citing disclosures by the PIF to the U.S. Securities and Exchange Commission. The report shows the Saudi fund no longer holds numerous tech stocks, including stakes of $600 million or more in each of Amazon, Microsoft and Salesforce. The wealth fund replaced its direct holdings in these and other tech stocks with call options on a lesser number of shares and also dropped entire stakes including $602 million in holdings of BlackRock, a $942 million investment in Carnival and a $757 million position in Booking.
Abu Dhabi Investment Authority: ADIA is part of the Gateway Development Alliance, which is offering to buy out Malaysia Airports Holdings Berhad in a deal worth $3.9 billion. ADIA, Abu Dhabi’s largest sovereign wealth fund, convened a meeting of the board of directors this week, chaired by Sheikh Tahnoon bin Zayed, Deputy Ruler of Abu Dhabi and Chairman of the Board of Directors of ADIA. The meeting was attended by Sheikh Mansour bin Zayed, UAE Vice President, Deputy Prime Minister and Chairman of the Presidential Court; and Sheikh Khaled bin Mohamed bin Zayed, Crown Prince of Abu Dhabi and Chairman of Abu Dhabi Executive Council. Also present were Sheikh Hamed bin Zayed, Managing Director of ADIA; and board members: Khalil Mohammed Sharif Foulathi, Jassem Mohamed Bu Ataba Al Zaabi and Hamad Mohammed Al Hurr Al Suwaidi; along with Musabah Khamis Al Mazrouei, the Board’s rapporteur.
Mubadala: Mubadala Capital completed its acquisition of Fortress Investment Group, a major investor in credit markets with a large allocation in U.S. rail. Terms of the deal were not disclosed, according to a statement on Wednesday by the two companies. Also this week, Mubadala convened a meeting of the board of directors, chaired by Sheikh Mansour bin Zayed. During the meeting, the Board approved its report and the company’s financial statements for the year 2023. The meeting was attended by Sheikh Theyab bin Mohamed bin Zayed, Deputy Chairman of the Presidential Court for Development and Fallen Heroes’ Affairs; Suhail bin Mohammed Al Mazrouei, Minister of Energy and Infrastructure; Dr. Sultan Al Jaber, Minister of Industry and Advanced Technology; Khaldoon Al Mubarak, Chairman of the Executive Affairs Authority, Member of the Executive Council, and Managing Director and CEO of Mubadala Investment; Abdul Hameed Mohammed Saeed, and Saif Saeed Ghobash, Secretary-General of the Abu Dhabi Executive Council. Meanwhile, M42, the Mubadala-backed healthcare conglomerate, launched a tool at its clinics in Abu Dhabi that incorporates artificial intelligence to automate screening for tuberculosis.
General Organisation for Social Insurance: Hassana Investment Co., which manages over $320 billion for Saudi Arabia’s main pension fund, the General Organisation for Social Insurance, is set to make “a substantial anchor commitment” to TPG Rise Climate’s new Transition Infrastructure fund, according to a statement Wednesday, under a $1.5 billion partnership with the San Francisco-based alternative asset manager.
↪↩ Closing Circuit
📈 Insurance IPO: Go Digit, an Indian insurance startup, raised $141 million from investors including Goldman Sachs, Abu Dhabi Investment Authority, and Morgan Stanley as part of its IPO.
🇪🇬 Installment Plan: The Egyptian government said on Wednesday it has received $14 billion as the second batch of funding from the $35 billion Ras El-Hekma development deal.
📊 Data Design: Weka, an Israeli startup that designs data platforms, raised $140 million in a Series E financing round, led by Valor Equity Partners, with participation of Nvidia, Qualcomm Ventures, and Hitachi Ventures.
💸 Growth Funds: UAE-based proptech company Keyper has raised $4 million in pre-series A funding and $30 million in Shariah-compliant sukuk financing, with the round led by Dubai-based BECO Capital and Middle East Venture Partners.
🏭 No Salt: Bahrain’s Electricity and Water Authority issued a tender seeking bids for construction of a new seawater reverse osmosis desalination plant on the Hawar Island off the southeastern coast of the kingdom.
🗣 Circuit Chatter
🌊 Eco Residents: The UAE has announced a long-term visa for environment advocates. The 10-year “Blue Residency” visa will be granted to individuals who have made “exceptional contributions and efforts in the field of protecting the environment.”
🛫 Africa Expansion: Qatar Airways will soon announce an investment in an airline in southern Africa as it seeks to expand its network across the continent, CEO Badr Mohammed Al Meer said at the Qatar Investment Forum on Wednesday.
🏌🏾 Big Swing: New York leisure company Five Iron Golf plans to open its biggest golf simulator location in Dubai, with founders Matthew Csillag and David Zabinsky planning a multi-unit franchise agreement spanning six sites in the UAE.
⚗️ Cancer Treatment: Abu Dhabi’s Technology Innovation Institute signed an agreement with the emirate’s Burjeel Medical City to collaborate on developing immunotherapy treatments for cancer.
💻 Skills Shortage: Experienced technology candidates, especially experts in artificial intelligence, software development and data science, are commanding top dollar, The National reports in its guide to tech sector salaries in the UAE.
🌍 Power Circuit
Bahrain’s King Hamad convened a summit meeting of the 22 member-nations of the Arab League today in Manama.
Saudi Arabia’s King Salman appointed Khalid Al-Abdulkarim as Secretary General of the Council of Ministers with the rank of a minister.
➿ On the Circuit
Mohammed bin Ali bin Mohammed Al Mannai, Qatar’s minister of communications and IT, said the country is developing its own Arabic large-language AI model called Fanar, which translates as Lighthouse, speaking onstage at the Qatar Economic Forum today.
NASA Administrator Bill Nelson said the Center for Space Futures, a joint project of the Saudi Space Agency and World Economic Forum, will bring together space industries to send a mission to the moon and help build a $2 trillion global space economy, speaking in an interview with Asharq TV in Riyadh.
Mootaz Soliman, a longtime Gulf hotel executive, was hired to be general manager of Saudi Arabia’s new Banyan Tree hotel in AlUla.
🎶 Culture Circuit
🛎️ Good Bones: Al Moudira, a luxury hotel in Luxor famed for its bygone-era glamour, is undergoing a transformation and expansion after it was sold to Cairo-based lawyer Florian Amereller. “I thought Al Moudira had the best bones in Egypt,” Amereller told the Financial Times, of his prized new hotel, which sits on the West Bank of the Nile, a stone’s throw from the Valleys of the Kings and Queens, the temples of Seti I and Hatshepsut, and the Tomb of Tutankhamun.
✨ Twinkle Twinkle: Saudi Arabia’s Red Sea region is on track to become one of the world’s largest dark sky reserves, with plans to cut light pollution to almost zero in order to attract stargazing tourists, The National reports.
🗓️ Circuit Calendar
May 20-21, New York City: SALT iConnections. SALT brings together more than 1,500 asset owners, asset managers and entrepreneurs for curated capital introductions and panel discussions. The Glasshouse.
May 20-22, Riyadh, Saudi Arabia: Future Aviation Forum. Airline executives, investors and government ministers gather for the third annual conference on the aviation industry. King Abdulaziz International Conference Center.
May 29-31, Marrakech, Morocco: GITEX Africa. The second edition of the biggest tech and startup gathering in Africa. Place Bab Jdid.
June 5, Hong Kong: Bloomberg Wealth Event. A gathering to bring actionable intelligence to portfolio managers and other dealmakers and analysts from asset managers and owners, family offices and hedge funds. Conrad Hong Kong.
June 23-26, National Harbor, Maryland: SelectUSA Investment Summit. The highest profile event in the U.S. to facilitate business investment by connecting thousands of investors, companies, economic development organizations and industry experts to make deals. Gaylord National Resort and Convention Center.
