The Weekly Circuit

This week we’re looking at FII on the road to Rio de Janeiro, the foray by AI founders into Saudi Arabia, Mubadala-backed Shein’s shopping for a London listing and ADIA’s $1 billion private equity tie-up with Pemberton But first, the UAE’s top security chief goes to Washington.

Sheikh Tahnoon bin Zayed visited the White House on Tuesday where the UAE National Security Adviser and chairman of Abu Dhabi Investment Authority and ADQ met with his U.S. counterpart Jake Sullivan. The meeting comes as Abu Dhabi has aligned itself with the world’s biggest economy on matters of technology development — inking a $1.5 billion investment from Microsoft for local artificial intelligence champion G42 earlier this year with backing from the Biden administration. 

Along with a delegation that includes other Abu Dhabi sovereign wealth fund executives, the visit focused on enhancing strategic relations between the two countries, with Sheikh Tahnoon speaking to Sullivan about “shared insights on regional and global issues of mutual concern,” the Emirati leader posted on X. Omar Al Olama, UAE Minister of State for Artificial Intelligence, said the UAE is seeking “a marriage” with the U.S. over technology development, speaking in an interview with the Financial Times published on Tuesday.

On Monday, Sheikh Tahnoon met with Deputy Secretary of State Kurt M. Campbell at the State Department in Foggy Bottom. The pair discussed artificial intelligence and driving economic growth both bilaterally and in Africa and India, according to a readout from the State Department.

Qatar and China are strengthening investment ties amid U.S. warnings to its Gulf allies about getting too close to Beijing. Most recently, the Qatar Investment Authority agreed to buy a 10% stake in ChinaAMC, the country’s second-largest mutual fund, from Hong Kong-based Primavera Capital, Reuters reports. 

Meanwhile, Saudi Arabia’s Future Investment Initiative, which hosts the annual “Davos in the Desert” gabfest, is decamping from its usual setting of the Ritz in Riyadh to the Copacabana Palace in Rio de Janeiro. This is the first time one of these pop-up summits have been held in Latin America, with previous FII PRIORITY gatherings happening in Hong Kong, Miami and Manhattan. This iteration will delve into climate action, the Gulf’s emergence among the BRICS nations and new technology.  

Speakers on the agenda include Yasir Al-Rumayyan, Governor of the Public Investment Fund and Chairman of the FII Institute; Reema Bint Bandar Al Saud, Saudi Ambassador to the U.S.; Faisal Bin Bandar Al Saud, Chairman of the Saudi Esports Federation; and Mike Pompeo, former U.S. Secretary of State. Also scheduled to speak are Khalid bin Abdulaziz Al-Falih, Saudi Minister of Investment; Martin Sorrell, Executive Chairman of S4 Capital Group; André Esteves, Chairman of BTG Pactual; Bernard Mensah, President of International at Bank of America; and Julia Dias Leite, CEO of the Brazilian Center for International Relations.

Welcome to The Weekly Circuit. Read on for the stories, deals and players at the top of the news across the MENA business landscape. Please send comments and story tips to [email protected].

HQ RIYADH

AI startups test the waters in Saudi Arabia’s tech push

Lured by generous housing allowances, free office space and potential government partnerships, startup founders are increasingly looking at Saudi Arabia as a home for their emerging artificial intelligence companies, Nour El-Shaeri writes for The Circuit.

Taking the Bait: The incentives are especially attractive for larger companies such as Vast Data, a $9.5 billion maker of software to manage AI’s massive data storage demands. Having already established a strong presence in the Middle East market, Vast Data is moving its regional headquarters from Dubai to Riyadh – and reaping dividends.

Carrot and Stick: The campaign to attract international businesses carries a carrot and a stick. Large companies that do not establish a regional headquarters in Saudi Arabia are barred from receiving government contracts under a law that took effect at the beginning of this year. 

Click here to read the full story.

FAST FASHION

Mubadala-backed Shein plans for super-sized London IPO

Fast-fashion disruptor Shein is reportedly planning to confidentially file for a London public listing as soon as this week, the first step in a super-sized initial public offering in the U.K., The Circuit’s Kelsey Warner reports.

Changing Plans: The Singapore-headquartered company, which counts Abu Dhabi’s Mubadala as a major shareholder, had been targeting a New York IPO in the second half of last year but Beijing-Washington tensions waylaid those plans. 

London Calling: To placate U.S. lawmakers in a bid to go public there, Shein has gone so far as to move its HQ from China to Singapore and stop selling its products in the world’s second-largest economy. Executive Chair Donald Tang told the Financial Times last month those efforts were not enough. Now the retailer is serving up a potential blockbuster to the sluggish London exchange.

Click here to read the full story.

Public Investment Fund: Saudi Arabia’s sovereign wealth fund has priced its inaugural sterling bond offering of £650 million ($830.3 million) under its existing Euro Medium-Term Note program. The PIF said the dual-tranche offering was more than six times oversubscribed, comprising $383.2 million for a 5-year coupon and $447 million for a 15-year note. Simplified Financial Solutions Co., a Saudi fintech startup known as SiFi, raised $10 million in a seed funding round led by PIF-owned Sanibel Investments. And the PIF-owned Riyadh Air has partnered with Singapore Airlines and Air China as the new carrier grows its network ahead of launching commercial operations next year, the airlines said on Tuesday. The kingdom is clamping down on its regional headquartering rule for firms looking to do business with the government, Bloomberg reports. The PIF has started adding language to agreements with bankers to determine if they have obtained a regional headquarters license in the country. Meanwhile, EV maker Lucid, which counts the PIF as its biggest shareholder, has opened its first showroom in the UAE as the struggling luxury carmaker eyes the Gulf as a core market for growth. 

Abu Dhabi Investment Authority: London-based Pemberton Asset Management is collaborating with ADIA to invest at least $1 billion in private equity firms through net asset value financing, a niche form of lending, Bloomberg reports. Singapore’s Temasek sovereign wealth fund, meanwhile, joined with Fidelity Investments to buy $200 million of shares in ADIA-backed Indian eyewear retailer Lenskart. The recent rejection of a £5 billion ($6.35 billion) bid from ADIA, CVC and Nordic Capital by the board of Hargreaves Lansdown is a “sign that bargain-hunting predators are circling over cheap-and-cheerless British companies,” according to an op-ed in the Financial Times that examines London’s revival for equity-raises. 

Mubadala: Russia’s Gazprom is unlikely to recover gas sales lost as a result of Vladimir Putin’s full-scale invasion of Ukraine for at least a decade, the Financial Times reports, citing a report commissioned for the Russian energy group’s leaders. Mubadala Energy holds a 44% stake in a Gazprom subsidiary that develops oil fields in Siberia. The Abu Dhabi sovereign wealth fund’s Mubadala Capital unit hired Sam Merksamer as a senior member of its private equity team, with a focus on direct investments, Bloomberg reports. Merksamer, a partner at Rajeev Misra’s One Investment Management, earlier worked at Softbank.

Mumtalakat: The Bahraini sovereign wealth fund signed a preliminary agreement with China Investment Corp., China’s largest sovereign fund, to explore potential investment opportunities. The agreement was reached during the state visit of King Hamad bin Isa Al Khalifa, President of the 23rd Arab Summit, and the accompanying official delegation’s visit to China last week.

ADQ: A consortium led by Abu Dhabi National Energy Co., or TAQA, which is owned by ADQ, secured $408 million in financing for Saudi Arabia’s Juranah Independent Strategic Water Reservoir project. Mohammed Saeed Al Remeithi was named CEO of Abu Dhabi Aviation, the ADQ-backed operator of helicopters and fixed-wing aircraft.

Dr. Sultan Al Jaber, the UAE’s Minister of Industry and Advanced Technology, CEO of Abu Dhabi National Oil Co. (ADNOC) and President of COP28, told delegates at the opening of Baku Energy Week in Azerbaijan that artificial intelligence should play a major role in global energy transition efforts to make the process more efficient.

Steven Mnuchin, the former U.S. Secretary of the Treasury during the Trump administration and founder of Liberty Strategic Capital, is the subject of a Bloomberg profile that tracks his recent career as manager of a $3 billion investment fund and his long experience raising money in the Gulf.

Diego Megia, a former senior trader at Millennium Management, raised $5 billion for his new Taula Capital Management hedge fund, tapping New York-based Millenium for as much as $3 billion, with the rest coming from investors including asset managers, pension plans and sovereign wealth funds, Bloomberg reports. Megia’s Millennium colleague Stefan Ericsson joined Taula as Deputy Chief Investment Officer at the firm, which has offices in London, Jersey, New York, Dubai, Milan and Bazel, Switzerland.

Dr. Thani bin Ahmed Al Zeyoudi, the UAE’s Minister of State for Foreign Trade, led a delegation visiting Malaysia on Tuesday, holding meetings with Prime Minister Anwar Ibrahim and Minister of Investment, Trade and Industry Zafrul Aziz amid continuing negotiations between the two countries on a free-trade agreement.

Scott Kleinman, Co-President of Apollo Global Management Inc., said he expects more private credit deals in the market after the U.S. private equity firm inked an $11 billion joint venture with Intel Corp. this week, speaking to Bloomberg TV on the sidelines of the SuperReturn International conference in Berlin on Wednesday. 

Jeffrey Katzenberg has raised $460 million for his investment firm WndrCo’s first dedicated venture capital funds, including a $60 million seed fund, with the Hollywood entrepreneur talking about the struggles of fundraising in an interview with The Information. He was in the Gulf last month for the Qatar Investment Forum. 

Hend Al Otaiba, UAE Ambassador to France, participated alongsideSultan Al Neyadi, Minister of State for Youth Affairs, in the “First Student Forum in France” organized by the Embassy of the UAE in Paris in collaboration with the Emirates World Youth Council in France on Monday.

🎶 Culture Circuit

🌙 Night Swimming: As the summer heat descends on the Arabian Gulf, a growing number of hotels and resorts are offering night swimming experiences so patrons can enjoy their luxury pools minus the UV exposure. The Terra Solis desert resort in Dubai will host swimming until 1 a.m. from this weekend, accompanied by DJ sets and live entertainment, while Cloud 22, the rooftop infinity pool at Atlantis the Royal, is offering moonlight sessions three times a week.

👟 Trend Point: Keen-eyed sneakerheads have spotted piles of Yeezy trainers on sale at half price at an Adidas outlet store in Dubai, prompting some existential questions about the once-viral fashion item, The National reports. Kanye West’s cult brand has suffered blowback from the rapper’s fall from grace, although it hasn’t put some diehards off, with one fan asking, “How much is a ticket to Dubai?” 

📽️ Screen Time: Saudi Arabia’s first film to be selected at the Cannes Film Festival, “Norah,” has been slated for release to local and international cinemas on June 20. The debut feature from director Tawfik Alzaidi follows the story of a failed artist in the 1990s who helps a student find her way. The film, which was shot in AlUla, was picked for the Un Certain Regard section of the festival, which recognises emerging talent and non-traditional narratives.

📷 Photo of the Week

🗓️ Circuit Calendar

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, Across MENA: 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.