👋 Hello from the Middle East!

Today in The Daily Circuit, we’re looking at Aramco’s imminent secondary stock offering, the China-Arab summit in Beijing, Pakistan’s reliance on funds from the Gulf and the star Saudi couturier set to unveil Riyadh Air’s crew attire in Paris next month. But first, a family affair for fund managers in the UAE’s capital.

Hundreds of investors gathered in Abu Dhabi today to discuss the future of family offices – a growing group that is steering an expanding pot of wealth to the region at a pivotal moment of economic transformation. “Our mandate is to stay away from oil,” Abdulrahman Al Suwaidi, Managing Director of the UAE’s AS Investments, quipped on a panel at the Abu Dhabi Family Office Summit on Saadiyat Island this morning, The Circuit’s Kelsey Warner reports.

Instead, the investors safeguarding the Gulf’s intergenerational wealth are looking to the diversification strategies in the region, such as Saudi Arabia’s Vision 2030 or the UAE’s “Future Economy” initiatives, to guide their investment decisions. Al Suwaidi, who was previously the director of investments for the ruling family of Dubai’s family office the Al Maktoums’ Dubai Holding, said his current fund is deploying capital in food security – they own a stake in the biggest halal poultry farm in the U.K. – as well as in green energy. 

In a part of the world overrun by fund managers looking to drum up capital, Ali Raza, CIO of Saudi Arabia Holding Co., said a key missing piece is how to effectively navigate the market. “This goes for any region in the world but this is really the gap here,” Raza said. Echoing Al Suwaidi, he implored would-be fundraisers to look to the economic transformation strategies in the countries where they are deal-hunting to identify opportunity. Raza’s fund is deploying capital into electric vehicles and future mobility as well as semiconductors and data centers, he said. “Think very literally about Vision 2030,” he advised. 

Family offices in the Middle East have grown rapidly in recent years, with total assets under management forecasted to hit a half trillion dollars in 2025, according to an analysis by Forbes. Some 45% of family offices in the region are managing a portfolio worth $251 million to $500 million, with another 32% presiding over $2.1 billion to $5 billion. Although slightly ahead of their Asian counterparts, the concept of family offices remains relatively new in the region, with less than half operating for more than a decade, Forbes found. By comparison, roughly two-thirds of U.S. and U.K. family offices have been around for more than 10 years. 

At a summit meeting in Beijing with member-states of the Arab League today, China’s President Xi Jinping called for stronger ties in the fields of energy, tech and manufacturing with the MENA region. “China will further enhance strategic cooperation with the Arab side on oil and gas, and integrate supply security with market security,” Xi told the 10th Ministerial Meeting of the China-Arab States Cooperation Forum.

UAE President Sheikh Mohamed bin Zayed, who is being hosted by Xi on a two-day state visit to the world’s second-largest economy, told the forum that developing relations with China is important for the Middle East and “we remain committed to building bridges of cooperation to advance a more prosperous future for all,” summarizing his remarks on X.

The Emirati leader’s China foray followed his state visit to South Korea and the signing of a free trade agreement between the two countries, which, according to Bloomberg, “stands out amid a rising tide of protectionism and tensions among the world’s biggest economies.”

ARAMCO OFFERING

Saudi Aramco, the world’s largest oil company, is generating renewed energy among investors as it moves forward with a secondary offering. The share sale is currently being planned to start on Sunday with the booking process to take orders and could raise more than $10 billion, making it the largest offering of its kind in years, Bloomberg reports. No final decisions have been made on the offering period and terms of the deal, including its size, could still change, according to the news agency. Aramco didn’t immediately respond to requests for comment. The offering is set to come days after Aramco’s stock dropped to the lowest level in over a year. The deal’s opening will coincide with next week’s OPEC+ meeting to discuss oil output policy, where the group is expected to maintain supply curbs. Saudi Arabia’s production is close to its lowest level in three years.

PAKISTAN CALLS

The UAE and Saudi Arabia have pledged to investbillions of dollars in Pakistan’s ailing economy as the Gulf states expand their influence in South Asia and Islamabad seeks to lessen its reliance on Chinese funding, the Hong Kong-based South China Morning Post reports. On a visit with UAE President Sheikh Mohamed bin Zayed in Abu Dhabi last week, Pakistani Prime Minister Shehbaz Sharif secured $10 billion in investments from the country. The UAE deal follows China’s push this month to revive infrastructure investments in Pakistan under its Belt and Road Initiative, the newspaper reported. Saudi Arabia, meanwhile, said last month it would fast-track $5 billion to Pakistan as part of an estimated $25 billion investment program. Pakistan is under economic stress after implementing a series of austerity measures in July that were required by the International Monetary Fund under a $3 billion emergency bailout program that helped the country avoid defaulting on its international payments.

💲 Sovereign Circuit

Public Investment Fund: The PIF was ranked as the sovereign wealth fund with the greatest brand value in the world, according to an analysis by London-based Brand Finance. The strategic consulting firm pegged the value of the PIF’s brand at $1.1 billion, praising the fund’s investment strategy, the trust in its name and awareness of its brand. Gulf International Bank, which is owned by the PIF, expects to raise $500 million from the sale of dollar-denominated five-year senior unsecured bonds, Reuters reports. The Saudi Red Sea Authority issued its first cruise ship maritime tourism license to Cruise Saudi, a PIF-backed shipping operator in Jeddah. PIF-owned Neo Space Group signed an agreement with SES, a Luxembourg-based satellite telecommunications company, to collaborate on launching an inflight network that promises seamless global web connectivity for airline passengers.

Investment Corporation of Dubai: The sovereign wealth fund, which operates as Dubai’s main investment arm, reported a 68% increase in 2023 net income from the previous year.

Mubadala: Danish private equity fund Polaris agreed to sell safety training provider RelyOn Nutec to Mubadala Capital, the wholly-owned asset management subsidiary of Mubadala Investment Co., for an undisclosed sum, it shared in a statement this week.

↪↩ Closing Circuit

💸 Portfolio Sale: Bahraini dual-listed investment fund Ithmaar Holding is going ahead with the sale of its financial and investment portfolios, worth $695 million to $715 million in assets and $665 million to $695 million in liabilities, to Bahraini investment bank GFH Financial, according to a disclosure to the Dubai Financial Market (DFM) and Bahrain Bourse.

🛢️ Refining Record: Kuwait’s oil refining capacity has reached a record 1.8 million barrels per day, boosted by its new Al-Zour refinery that is among the biggest in the Middle East.

🥤 Inconvenient Purchase: Electra Consumer Products sold off the eight 7-Eleven convenience stores it opened in Israel over 18 months, receiving $810,000 from buyer Seven Express after losing over $16 million as the Texas-based chain’s franchisee.

🗣 Circuit Chatter

🛫 First Class: Qatar Airways was named the world’s best airline by aviation industry website AirlineRatings[dot]com, with Dubai-based Emirates ranked No. 5 and Abu Dhabi’s Etihad No. 8.

⚖️ Moscow Law: Dubai-based Habib Al Mulla & Partners announced it will open the first office of a UAE law firm in Russia, focusing on commercial law, investment law and dispute resolution.

🤖 AI Partners: Saudi Arabia’s Ministry of Media signed a preliminary agreement with Microsoft Arabia to cooperate in the fields of artificial intelligence, machine learning, data analysis, cybersecurity and software development.

🛩️ Mideast Hub: Italy’s ITA airlines announced it will fly five weekly flights between Riyadh and Rome, supporting Saudi Arabia’s ambitions to become a regional aviation hub.

🌐 AI Player: The UAE’s push to develop artificial intelligence tools such as the Arabic-language Falcon large language model shows the country’s potential to become a major player in global technology, Kevin Miller, Vice President for Global Data Centres at Amazon Web Services, told The National.

🌍 Power Circuit

Sheikh Khaled bin Mohamed bin Zayed, Crown Prince of Abu Dhabi and Chairman of the Abu Dhabi Executive Council, attended the graduation ceremony on Wednesday at Khalifa University, expressing the emirate’s commitment to investing in education and preparing students with the skills to help build the UAE’s knowledge economy.

Sheikh Saudi bin Saqr Al Qasimi, Ruler of Ras Al Khaimah, toured the Sobha Model Industries factory in the emirate’s Al Hamra Industrial Area on Wednesday to highlight the importance of manufacturing and advanced technology to the UAE’s economy.

➿ On the Circuit

UAE Minister of Economy Abdulla bin Touq Al Marri signed a preliminary agreement on intellectual property protections with Kathi Vidal, U.S. Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trade Office, during a visit to Washington.

Guy Smith has been tapped to become Senior Managing Director and Head of Global Corporate Finance at First Abu Dhabi Bank, the UAE’s largest lender. He joins from Nomura in Hong Kong. 

Majid Sultan Aljoker has been tapped to head the Corporate Resilience Department at Dubai Airport in addition to his role as COO. The move comes amid a management reshuffle at the world’s busiest international airport, in line with Emiratization goals, Enterprise reports. Adil Al Fahim, current CFO at Dubai Airports, will handle corporate assurance; Meshari Al Bannai was appointed Chief People Officer; Omar Binadai was appointed Chief Technology and Infrastructure Officer and Buti Qurwash expands his role to become Senior Vice President of Safety and Security Affairs.

Simon Kim, Founder of Hashed, and Gabrielle Inzirillo, Head of Ecosystem Development at ADGM, will be in conversation next Wednesday, June 5 at Abu Dhabi Global Market covering topics around Web3 venture capital and cross-border collaboration.

🎶 Culture Circuit

✈️ High Fashion: Saudi couturier Mohammed Ashi will design the first cabin crew uniform for PIF-owned Riyadh Air, which will be unveiled next month during Paris Fashion Week. Ashi, the first designer from the Gulf to join France’s Fédération de la Haute Couture as a guest member, has created clothing worn by Beyonce, Lady Gaga and Queen Rania of Jordan. “It’s an exciting time to be in Saudi Arabia and to witness another Saudi brand going global,” he said.

📷 Photo of The Day

🗓️ Circuit Calendar

May 29-31, Marrakech, Morocco: GITEX Africa. The second edition of the biggest tech and startup gathering in Africa. Place Bab Jdid. 

June 2, Muscat, Oman: Taiwan Trade Mission to Oman. Taiwan trade officials invite Omani investors and entrepreneurs for one-on-one meetings at conference. Crowne Plaza Muscat.

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 11-13, Rio de Janeiro, Brazil: Future Investment Initiative Priority Summit. Saudi Public Investment Fund holds FII conference for first time in Latin America. Copacabana Palace.

June 16-18, Eid Al Adha. Government offices and businesses are closed across the MENA region for the Islamic holiday. Dates are subject to sighting of the moon by state religious committees in each country.

June 22-23, New York City: Mubadala New York Sail Grand Prix. Flying catamarans compete at SailGP’s two-day racing festival in New York Harbor. Governors Island.

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.

July 15-26, Granada, Spain: ADIA Lab International Summer School. A course of lectures and case studies to explore the critical role of trust and safety in AI, examining the ethical, technical and societal implications of AI applications. University of Granada.