Abu Dhabi launches FIDA hub to shape future of global finance
Abu Dhabi unveiled a new financial services hub to help launch companies and assist them in managing regulatory obstacles that hamper growth.
Launched on Tuesday by the Abu Dhabi Investment Office and the Department of Economic Development, the platform will be known as FIDA – the FinTech, Insurance, Digital and Alternative Assets Cluster – and is projected to contribute some $15 billion to Abu Dhabi’s economy by 2045.
“By bringing investors, regulators, global institutions and technology innovators into an integrated cluster, Abu Dhabi is the preferred destination for those building digital assets, AI-powered insurance and breakthrough fintech platforms,” Badr Al-Olama, ADIO’s Director-General, said.
FIDA was introduced by Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and Chairman of its Executive Council, amid the torrent of product announcements, conferences and cocktail parties during Abu Dhabi Finance Week.
During one of the events on Monday, Carlyle Group Chairman David Rubenstein was asked by UAE Investment Minister Mohamed Alsuwaidi, who is also CEO of sovereign wealth fund ADQ, how he assessed the UAE’s financial development, Khaleej Times reports. Rubenstein cited a music critic 30 years ago who said, “I’ve just seen the future of music, and its name is Bruce Springsteen.” Today, Rubenstein said, “I’ve seen the future of capitalism, and its name is Abu Dhabi.”
Across town at the media-focused BRIDGE Summit, executives from Meta, Yango, Huawei and HeyGen headlined sessions on the use of AI in content, marketing and consumer products. Actor Idris Elba said the conference was about cultural connectivity and empowering creators in a more inclusive global media ecosystem. “Let’s use this opportunity at the Summit to connect, form, create and distribute ideas,” he said.
Jeff Zucker, CEO of RedBird IMI and RedBird Capital Partners, said journalism’s future will be driven by trusted individual voices rather than traditional media. “Institutions used to confer credibility upon the individual, but now it’s the other way around,” he said. “I think people are looking much more to individuals in this new creator economy, this new AI world.”
QIA launches $2.5 billion private equity fund with Japan’s Orix
Qatar’s sovereign wealth fund is joining forces with Orix, a Tokyo-based financial services company, to launch a $2.5 billion private equity vehicle hunting for opportunities across Japan.
The agreement marks the Qatar Investment Authority’s first Japan-focused PE investment, with Orix supplying 60% of the capital and QIA filling in the rest,Bloomberg reports.
Qatar joins a growing number of investment firms, including Blackstone and KKR, that are looking into buyouts in Japan.
The new Japan fund will target companies valued above $195 million, guided by an independent investment entity while both firms participate as limited partners.
Mubadala is ‘zooming in’ on AI, CEO Khaldoon Al Mubarak tells Milken
After two days of onstage chats with some of the legion of friends he’s cultivated and mentored in the investment world, Michael Milken turned to Khaldoon Al Mubarak, Managing Director and Group CEO of Abu Dhabi’s Mubadala sovereign wealth fund and someone he’s coached for 20 years, for Friday’s conference finale.
Sitting opposite each other on white swivel chairs before the packed ballroom, the 78-year-old Wall Street guru quizzed 49-year-old Al Mubarak on how the $330 billion fund makes investment decisions.
“Right now, when it comes to the future of the world, the sectors that are going to be growing and prospering – AI, technology, financial services, life sciences, health services – these are the sectors that we’re going to be zooming in on,” Al Mubarak said. “We are… making sure we have the right framework in place to allow our businesses to grow and scale up, but allow also the world to come here and grow and scale up here.”
The day’s events opened with a brief greeting from U.S. Ambassador to the UAE Martina Strong, who invoked the $1.5 billion investment that Microsoft made this year in Abu Dhabi’s G42 artificial intelligence firm. “The United States and the UAE are working together for a very solid platform of shared objectives, mutual trust and long-standing friendships that we have built up over the past five decades.”
Among the prominent figures drawn to Abu Dhabi was John Kerry, the former U.S. Senator and White House Climate Envoy, who was chatting in the lobby with California-based investor Thomas Steyer, founder of Farillon Capital, which manages $20 billion in assets.
Speaking on the stage at a panel about revamping cities for the future, U.S. Ambassador to India Eric Garcetti, the former Mayor of Los Angeles, said urban policymakers need to figure out how to protect their people and provide them with better lives. “It’s the same in New Delhi as it is in Los Angeles,” he said. “Good mayors borrow, great mayors steal from other mayors. You would be surprised about what risks people will take.”
Dr. Jill Biden, First Lady of the United States, told a packed ballroom on Thursday that she’s proud of the progress made by the Biden administration in advancing medical care and education about women’s health after years of neglect. “I remember going to my husband and saying, ‘Joe, this can’t go on.’”
Among the showcase activities during the Milken Summit was interviewing and whittling down the list of competing startups for the annual $1 million Milken-Motsepe Fintech Prize, which aims to expand access to capital and financial services for small businesses in emerging and frontier markets. Nominees made pitches this week in hopes of competing in the final round taking place at the Milken Institute’s flagship Beverly Hills conference in May, where the prize will be presented.
In an interview with The Circuit, Margaret O’Connor, the chairperson of Mauritius-based Launch Africa and a judge for the Milken-Motsepe award, said the program is a major incentive for the continent’s young companies.
“I actually have goosebumps because we’re at a moment in time where we’re building systems to create systematic connectivity,” O’Connor said. ”The GCC needs African talent – AI talent and entrepreneurial talent and business talent. GCC also needs access to African markets [while] African entrepreneurs need access to GCC markets and capital.”
The Weekly Circuit: Aramco disputes oil slump forecast + PIF pumps up Lucid
👋 Hello from the Middle East! This week we’re looking at a new Abu Dhabi financial services company under the IHC umbrella, the extra $1.5 billion that EV carmaker Lucid is getting from the Saudi PIF, Oman’s plan to build artificial reefs through 3D concrete printing and Bahraini runner Winifred Yavi’s gold medal at the Paris Olympics. But first, Aramco disputes forecasts of lower oil prices.
Washington energy analysts are backing expectations of a slump in global demand for oil next year that is likely to bring lower crude prices. Saudi Aramco CEO Amin Nasser disagrees.
In its monthly report released on Tuesday, the U.S. government’s Energy Information Administration said global crude consumption will be about 104.5 million barrels a day in 2025, a drop of 200,000 barrels a day from its earlier forecast. With China, the world’s largest crude importer, expected to cut back its oil usage, the agency reduced its projected demand growth rate for next year to 1.6%.
Aramco’s Nasser, on the other hand, says oil will rebound from the selloff this week that brought prices to their lowest level since January. Speaking in a conference call on Tuesday about the company’s lower-than expected second-quarter earnings, Nasser said energy traders have been too quick to respond to global concerns about a U.S. economic slowdown, Bloomberg reports. “The market to my view is overreacting and the fundamentals do not support the drop in prices that we are witnessing today,” Nasser said.
Brent crude dropped to almost $75 a barrel on Monday, alongside the rout in global stock markets. Despite Aramco’s profit falling in the second quarter due to OPEC+ limits on production, Nasser said demand for oil is expected to rise by 1.6 million to 2 million barrels a day this year.
Sliding profit didn’t stop Aramco from paying a $31 billion dividend in the second quarter. The state-owned petroleum producer reported that net income fell 3.4% to $29.1 billion in the three-month period ended June 30 compared with a year earlier.
Aramco, nevertheless, distributed the dividend, which is the lifeblood of Crown Prince Mohammed bin Salman’s Vision 2030 plan to diversify the economy from dependence on oil and finance more than $1.5 trillion in megaprojects such as the Neom development on the kingdom’s Red Sea coast. Shares of Aramco, the world’s largest oil company, have declined 19% this year, underperforming rivals such as Exxon Mobil and Shell.
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].
UAE’s Rorix to capitalize on free-trade pacts as IHC subsidiary
IHC Chairman Sheikh Tahnoon bin Zayed met former U.S. President Barack Obama during his visit to Washington in June. (Photo: Sheikh Tahnoon bin Zayed / Twitter)
International Holding Co., the broad-based conglomerate controlled by UAE power broker Sheikh Tahnoon bin Zayed, is expanding its financial services business by forming Rorix Holdings, The Circuit’s Jonathan Ferziger reports.
Money Spinner: The new company under the IHC umbrella will focus on finance, commodities trading and trade insurance, the parent company said in a statement on Monday.
Trade Route: Through Rorix, IHC said it expects to accelerate trade volumes, attract foreign investment, and broaden economic partnerships. The new firm will seek to capitalize on a flurry of free trade agreements the UAE has signed in the past three years.
Saudi PIF pumps another $1.5 billion into Lucid Motors
An EV made by Lucid Motors, which is majority owned by the PIF, is displayed during the Geneva Motor Show. (Photo: Getty Images)
Saudi Arabia’s Public Investment Fund has pumped another $1.5 billion into electric vehicle start-up Lucid Motors ahead of the launch of its first SUV later this year, The Circuit reports.
Cash Injection: The PIF, which already has a 60% stake in California-based Lucid after investing about $8 billion over several years, will buy $750 million in convertible preferred stock and provide a $750 million loan facility through Ayar, an affiliate investment company.
Expedited Delivery: Nasdaq-traded Lucid reported Q2 earnings on Monday, recording a $790 million net loss, but beating analyst expectations with $200 million revenue after delivering 2,394 cars in the quarter.
Public Investment Fund: Saudi Arabia’s sovereign wealth fund has invested $750 million in Magic Leap, a 14-year-old augmented-reality company that’s still searching for a workable business model and says it needs even more cash, Bloomberg reports. Prince Alwaleed Bin Talal’s Kingdom Holding Co., which is 17% owned by the PIF, reported that it has more than doubled its net profit year-on-year in Q2 to 624.2 million riyals ($166.5 million).
Mubadala: Emirates Global Aluminium, a Mubadala-backed manufacturer, said it used an LNG-fueled cargo vessel to ship bauxite to China, cutting greenhouse gas emissions by as much as 28% over conventional transport. MGX, the artificial intelligence mega-fund created in January through a partnership between Mubadala and G42, has reportedly joined a consortium in a bid for Australian data center AirTrunk in a deal worth more than $12.8 billion.
Abu Dhabi Investment Authority: Hargreaves Lansdown gave a consortium led by ADIA and CVC Advisers until Aug. 9 to make a firm offer of at least $6.9 billion for the British investment platform. L’Oreal is buying a 10% stake in Galderma Group, a Swiss maker of injectable skin fillers, from a consortium that includes ADIA, Sunshine SwissCo and Auba Investment.
Qatar Investment Authority: Nasser Al-Khelaifi, chairman of QIA-owned Qatar Sports Investments, the majority owner of the Paris-Saint Germain football club, has become one of French soccer’s most influential figures, Bloomberg reports.
↪↩ Closing Circuit
🏭 Chemical Reaction: Saudi Aramco agreed to pay about $700 million to purchase an additional 22.5% stake in refining and chemical firm Petro Rabigh from Japanese joint venture partner Sumitomo Chemical Co, becoming the company’s majority owner.
🚜 Caterpillar Distributor: Saudi Arabia’s Zahid Group is in talks to acquire South Africa-based Barloworld, the distributor in Africa for Caterpillar’s construction and mining equipment, which has an approximate corporate value of $886 million, Bloomberg reports.
💼 Deal Dropped: Dubai’s Sidara is calling off efforts to spend $2 billion on a buyout of the U.K.’s John Wood consulting firm, which advises on engineering projects in the energy field, citing geopolitical risks and market uncertainty. The shares plunged 40% after the announcement.
🏦 Banking Bid: Dubai-listed Emirates NBD has been shortlisted to submit a bid to buy a majority stake in Indian state-backed IDBI Bank, vying with Canada-based Fairfax Financial Holdings and Indian lender Kotak Mahindra Bank, Reuters reports.
👟 Keeping Track: Placer.ai, an Israeli startup platform for tracking location and foot traffic data, raised $75 million in a funding round limited to current investors, including Josh Buckley, WndrCo, Lachy Groom, MMC Technology Ventures, Fifth Wall Ventures, and Array Ventures.
🗣 Circuit Chatter
☁️ Billowing Cloud: Oracle has opened its second cloud region in Saudi Arabia, enabling the kingdom to get more value out of artificial intelligence, The National reports.
🛩️ Fraud Alert: The UAE’s Securities and Commodities Authority and Etihad Airways issued notices alerting the public to fake advertisements inviting people to invest in a fictitious IPO for the Abu Dhabi airline.
💵 India’s Wealthy: Nuvama Private, one of India’s largest wealth management firms, has opened an office in Dubai International Financial Centre, from which it intends to steer its Middle East business.
🐠 3D Reefs: Omantel, the state-owned telecom company, and Omani startup Innotech, signed an agreement to build artificial reefs through 3D concrete printing with the aim of increasing the depleted fish population.
🛫 Maintain Altitude: Jordan has asked all airlines landing at its airports to carry 45 minutes of reserve fuel, in what experts see as a precautionary measure in case of an attack by Iran against Israel, Reuters reports.
🌍 Power Circuit
U.S. President Joe Bidenspoke withSheikh Tamim Bin Hamad, the Emir of Qatar, and Egyptian President Abdel Fattah El-Sisi in separate phone calls on Tuesday about how to stop growing regional tensions from turning into a war.
Sultan Haitham of Oman was greeted by U.K. Prime Minister Keir Starmer for a meeting at his 10 Downing Street office in London, where they discussed trade between their two countries and rising Middle East tensions.
UAE President Sheikh Mohamed bin Zayedtalked by phone with Kenyan President William Ruto about economic cooperation in sectors including renewable energy, technology and infrastructure.
Sheikh Maktoum bin Mohamed, Deputy Prime Minister and Finance Minister of the UAE, Deputy Ruler of Dubaiand Chairman of Dubai Media Inc., toured DP World’s London Gateway Logistics Park, where he was met by DP World Chairman and CEO Sultan Ahmed bin Sulayem.
Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and Chairman of the emirate’s Executive Council, placed medals on the winners of the World Junior Mixed Martial Arts Championship at the Mubadala Arena in the UAE capital.
➿ On the Circuit
Nabil Ouajjane, founder of London-based Aster Capital Management, is moving to Dubai and opening an office amid a wave of investment firms building up their presence in the Gulf.
Sheikh Theyab bin Tahnoon, who was appointed as the new chairman of Dubai-listed contractor Drake & Scull on Friday, said the company will play a “vital” role in the UAE construction sector.
Winifred Yaviwon Bahrain’s first medal at the Paris 2024 Olympic Games, securing gold in the women’s 3000m steeplechase and setting a new Olympic record with a time of 8:52.76 minutes.
Jared Kushner, founder of Gulf-backed private equity fund Affinity Partners, plans to spend $1 billion to turn bombed-out buildings in Albania and Serbia into luxury hotels and homes, Bloomberg reports.
Sultan bin Abdulaziz Al-Deghaither, the CEO of Zain who is credited with turning around the mobile telecommunications operator by eliminating more than $500 million in accumulated losses and tripling the company’s market capitalization, has died.
🎶 Culture Circuit
🎤 They’re Back: Seminal 90s pop group the Backstreet Boys will return to Abu Dhabi for a performance at Etihad Arena on Oct. 23. The vocalists, known for hits including “Everybody” and “I Want It That Way,” will be back little more than a year after their first gig in the UAE capital as part of their DNA World Tour last May, which sold out in six hours, The National reports.
⚾ Batter Up: Baseball United, the first professional baseball league focused on the Middle East and South Asia, announced plans to start its opening season Oct. 23 in the UAE, with a championship tournament scheduled for next February.
📷 Photo of the Week
Sultan Haitham of Oman leaves 10 Downing Street in London following a meeting with U.K. Prime Minister Keir Starmer on Tuesday. (Photo: Getty Images)
🗓️ Ahead on The Circuit
Aug. 12-15, Riyadh, Saudi Arabia: Saudi Food Expo. One of the kingdom’s largest trade shows for the food & beverage industry. Riyadh Front Exhibitions.
Aug. 24-25, Riyadh, Saudi Arabia. New Global Sports Conference. Uniting top players to showcase how esports can create new global opportunities. Four Seasons Hotel Riyadh.
Sept. 1-7, Dubai, UAE. Dubai Fashion Week. Promoting Dubai’s creativity and fashion businesses to a worldwide audience. Dubai Design District.
Sept. 10-11, Dubai, UAE: Global Vertical Farming Show 2024. Annual event brings together investors, growers, and executives in the vertical farming industry from around the world. Le Méridien Dubai Hotel & Conference Centre.
Sept. 24-25, Dubai, UAE: ACT Middle East Treasurers Summit. Corporate treasurers and financial professionals from across the region gather for policy discussions on issues ranging from cash management to sustainability. Grand Hyatt Dubai.
Sep. 30-Oct. 2, Dubai, UAE: Future Hospitality Summit. The global conference for leaders in the hospitality industry expands this year at a new location with dedicated space for ESG planning, country pavilions and a larger exhibition area. Madinat Jumeirah.
Financial advisors turn to Gulf’s ultra-high-net-worth families
More financial services firms that cater to ultra-high-net-worth families are popping up in the Arabian Peninsula as family offices emerge as one of the fastest-growing segments for wealth creation.
Octagon, a Dubai-headquartered family office-as-a-service firm, announced on Thursday it is now taking UAE clients.
The Great Wealth Transfer is forecasted to pass nearly $20 trillion from the older generations to Gen-X, Millennial and Gen-Z adult children and grandchildren over the next two decades.
This phenomenon will be acutely felt in the UAE and Saudi Arabia, where family businesses make up about 90% and 60% of private companies, respectively, according to government figures.
More family offices are cropping up to deploy this expanding pot of wealth as diversification from oil picks up pace in the region and opportunities for investment expand.
Octagon says it is geared specifically to family offices – for established and newly incorporated entities – with services including asset management, corporate services, business management and investment development in “lifestyle verticals” such as real estate, education and health.
Family office clients “have different wealth management perspectives – with more diversified portfolios, and a greater technology and impact focus,” the company said in a media release.
UAE looks to unify a national investment strategy, minister says
ABU DHABI, United Arab Emirates — The United Arab Emirates is working to develop a single financial strategy for its sometimes competitive constituent emirates, Investment Minister Mohamed Alsuwaidi said on Thursday.
Each of the seven local governments, which banded together in 1971 to form a federation, has historically managed its own priorities, said Alsuwaidi, who was tapped to lead the newly formed Ministry of Investment in July.
Amid increasing competition from neighboring Saudi Arabia and a booming population – Alsuwaidi predicted a doubling to 10 million over the next decade – the UAE is positioning itself to attract multinational companies and increase opportunities domestically and globally for its homegrown entities. He was speaking today at the Milken Institute’s Middle East and Africa Summit in Abu Dhabi.
Alsuwaidi, who is also chief executive of Abu Dhabi’s strategic investment fund ADQ, said the new ministry would “not be involved in asset allocation” or “influence decisions made by the Abu Dhabi Investment Authority, Mubadala or the Dubai sovereigns.” Instead he sees the role of the ministry as helping UAE companies enter new markets, particularly nearby, and attract foreign investment.
“Before we have to travel further than three or four hours, there are enough projects in the region to expand and take our businesses to the next level and that’s really our aspiration,” Alsuwaidi said, There is a drive, he said, for “more investments in financial services and financial institutions and attracting those family offices and asset managers.”
Alsuwaidi cited specific examples of expansion, some in his own portfolio: the ADQ-owned energy company TAQA has opened power plants in Uzbekistan and Morocco; ADNOC is eyeing international gas projects; and ADQ-backed PureHealth, which is going public, acquired a business in the U.K. and a stake in a U.S. healthcare provider earlier this year.
Saudi Arabia, the Middle East’s biggest economy, announced tax incentives on Wednesday to further entice multinational companies to set up regional headquarters there, a direct challenge to the UAE’s current primacy as the region’s business and trade hub.
Alsuwaidi brushed off the question of competition or the threat of conflict in the region: “Conflicts around the region has never stopped us from attracting talent from attracting people to come and set up shop has never attracted or deterred people from looking at the quality of security and life that they that we can offer in the UAE.”
UAE offer for Israeli insurer paves way for more deals, minister says
TEL AVIV, Israel – While regulators scrutinize a bid from the United Arab Emirates for Israel’s largest insurance company, the Gulf state will be looking to broaden its interests in the Israeli financial services industry, Minister of State for Foreign Trade Thani Al Zeyoudi told The Circuit.
Al Zeyoudi said the offer last week from a consortium led by Abu Dhabi-based ADQ for a controlling stake in Israel’s Phoenix Group was “just another signal that relations are going to grow.” Israeli insurers, financial services companies and fintech startups are among the most attractive candidates for partnerships and acquisitions, he said.
In a video interview from his office in Abu Dhabi, the UAE’s capital, Al Zeyoudi also said he expects ties between the two countries to strengthen under returning Israeli Prime Minister Benjamin Netanyahu. He said the free-trade agreement that the UAE and Israel ratified on Dec. 11 would likely reach its goal of generating an annual $10 billion in bilateral economic activity by 2026, two years ahead of the ministry’s earlier projections. Two years after the UAE, Bahrain, Morocco and Sudan signed agreements to normalize relations with Israel, he said more Arab countries are getting ready to engage with the Jewish state.
“There is a growing appetite across the region for collaboration and cooperation,” Al Zeyoudi said. “There are now six countries in the Arab world that have recognized Israel and the benefits of these ties will accumulate as trade flows increase. Obviously, we cannot decide for other countries because it’s [a matter of] sovereign rights. But I’m sure through these engagements and the results from our economic and bilateral trade, it’s a signal to everyone how important and how powerful this cooperation is.”
In his own efforts to understand the Israeli financial services market, Al Zeyoudi said he developed a warm relationship with Samer Haj-Yehia, chairman of Bank Leumi, Israel’s largest lender. Haj-Yehia, an Arab citizen of Israel, was a surprise speaker in October at the mammoth Future Investment Initiative conference in Saudi Arabia, even though the two countries do not have diplomatic relations. Al Zeyoudi first met the banker during a meeting with Israeli business leaders in Dubai on Sept. 15, 2020, the day the Abraham Accords were signed in Washington. “Since then, the relationship is very close with him,” Al Zeyoudi said. Haj-Yehia, who also spoke at conferences in the UAE last month, acknowledged through a Leumi spokesman that he has met with the Emirati minister and declined to comment further.
Al Zeyoudi, 40, who was previously minister of climate change and the environment, studied at the University of Tulsa in Oklahoma for a bachelor’s degree in petroleum engineering. He earned an MBA at the New York Institute of Technology and later went to the SKEMA Business School in Lille, France, for a PhD in strategy, program and project management.
In the insurance deal, Al Zeyoudi said ADQ, a holding company owned by the Abu Dhabi emirate, is prepared to confront concerns expressed in Israel about foreign control of Phoenix, the largest manager of employee pension funds. The investment group it leads signed a term sheet last week with Phoenix’s controlling shareholders, U.S. investment firms Centerbridge Partners and Gallatin Point Capital, to buy between 25-30% of the company’s shares for as much as $800 million.
“It’s all been studied very well and thoroughly from both sides,” he said. “No deals will be signed without the full picture [being] put on the table, being discussed, being tackled, and then we move on to the next level.”
The Marker, an Israeli financial newspaper, called the proposed sale “an irresponsible and unprecedented act of folly” because it gives the UAE too much power over the pension savings of Israeli citizens. A 2017 bid by China’s Fujian Yango Group to buy control of Phoenix was withdrawn after it was rejected by Israel’s Capital Market, Insurance and Savings Authority.
If ADQ’s offer is accepted by the regulator, the deal would be one of the biggest between the UAE and Israel since the Abu Dhabi sovereign wealth fund Mubadala bought a 22% stake in an offshore Israeli natural gas field last year for $1 billion.
“It probably won’t be approved easily and it won’t be a quick decision,” said Nimrod Goren, president of Mitvim, the Israeli Institute for Regional Foreign Policies, and a senior fellow at the Middle East Institute in Washington. “There will be attempts to put all sorts of safeguards around it,” he told The Circuit.
Regarding Netanyahu’s comeback, Al Zeyoudi said the UAE has grown used to Israel’s frequent government transitions and doesn’t expect political changes to interrupt growth in trade between the two countries. Some Israeli investors have expressed concern that cabinet members in Netanyahu’s proposed government who want to annex the West Bank will reignite conflict with the Palestinians.
”Believe me, this will not affect the economy because everyone wants the numbers to grow,” Al Zeyoudi said. Netanyahu “was part of the initiation of the Abraham Accords and I’m sure he will make sure of its success.”
In the interview, Al Zeyoudi touched on how the collapse of FTX has affected the UAE’s efforts to promote itself as a world center for cryptocurrency trading and research.
“Obviously there’s concern when a high-profile business appears to have violated its customers’ trust in this way,” he said. “It offers a clear signal about the need for regulations, consumer protections, proper law and international conventions in the sphere.”
Given his experience as environment minister and a previous post as the UAE’s representative to the International Renewable Energy Agency (IRENA), which is based in Abu Dhabi, Al Zeyoudi said he’s looking forward to next year, when his country plays host to the U.N.’s annual climate change conference, COP28.
Beyond his desire to showcase cooperation between government and private industry in converting to sustainable energy sources, Al Zeyoudi said the UAE will also highlight the deal it brokered in which Jordan will provide solar energy to Israel in exchange for water from an Israeli desalination plant on the Mediterranean. The three sides signed a memorandum of understanding last month at the COP27 conference in Sharm el-Sheikh, Egypt.
“We’re looking forward to bringing the world here,” he said. “Sustainability is embedded with us as a nation. We have diversified our economy and diversified our energy mix. This is the story that we want to bring to the table, to discuss the real impact and the practical actions that we have taken on the ground.”
Meet the UAE’s unofficial business ambassador
Emirati investor Sabah al-Binali is a seasoned financial services executive, but 18 months after the Abraham Accords, he is adding another, albeit informal, role to his already impressive portfolio: business ambassador.
“People call me for advice from both sides,” al-Binali, partner and executive chairman of OurCrowd Arabia, one of the largest global venture investing platforms based in Jerusalem, told The Circuit of his work connecting Israeli and Emirati companies. Trade and investments between the two countries are already flourishing, reaching an estimated over $600-$700 million within the first year. In September, Emirati Minister of Economy Abdulla bin Touq Al-Marri predicted that economic activity with Israel could reach more than $1 trillion over the next decade.
“I get Emirati businessmen asking me, ‘How do I manage this guy, he’s calling three times a day?’” said al-Binali, who forged close ties with Jewish and Israeli peers as an undergraduate student at Princeton University. “I tell him, be direct, say, ‘Don’t call me three times a day, I’ll get back to you about this point.’”
And he also has a message for Israelis eyeing business opportunities in the Gulf too: slow down – and prioritize hiring those with experience working with Emiratis, who can help to navigate cultural differences.
“I know I’m generalizing here, but Israelis have a strong entrepreneurial spirit and are quick decision-makers, while in the UAE, you have good, long-term strategic thinking,” said al-Binali, adding, “If we can synergize this fast-decision-making entrepreneurial spirit with the thoughtful, strategic thinking, then it could be the best partnership in the world — it could be unbelievable.”
Finding a way to bridge these contrasting business styles is exactly what al-Binali, who took up the position of executive chairman just a few weeks after the normalization agreements were signed in September 2020, is trying to do for OurCrowd and for the Abraham Accords.
This week, foreign ministers from Israel, the UAE, Bahrain, Morocco and Egypt, as well as Secretary of State Tony Blinken, held a historic diplomatic summit in Israel’s Negev desert.
Al-Binali, who is considered one of the most senior Emirati nationals operating on behalf of an Israeli venture capital firm, says the next step is creating similar interaction in the business realm.
But first, he told The Circuit, some key misconceptions and even a level of mistrust must be addressed and dispelled.
In August 2020, when he first began talking to OurCrowd CEO Jon Medved about taking on the unprecedented role, al-Binali told him, “If you’re going to have this view that you go to the UAE to raise money, then I am the wrong person for the job, and you’ll probably not raise even one cent.”
“I think we’ve got to get away from this fantasy that the opportunity here is money coming from the UAE and technology coming from Israel,” Binali continued. “Israeli startups are drowning in money and so, you know, without being cynical, if that’s what people are looking at as the opportunity, I believe, they will be disappointed.”
Instead, he said, the countries can be mutually beneficial to one another on multiple levels. al-Binali believes that Israel and the UAE can serve as a gateway for one another. The Emiratis, who are active in Africa and Southeast Asia, can open up new markets for Israel. And Israel’s close ties with the U.S. are attractive for Emirati companies.
On another level, the two markets can become a testing ground for new innovation. Al-Binali points out that similarities in size and scale between the two Middle Eastern states makes them ideal partners.
“Some Israeli startups are fortunate enough to start commercializing in the States, and obviously the big market is where everyone wants to go, but there are also many that just can’t make that big jump from Israel to the U.S., so it makes sense for them to use the UAE as a gateway to other countries in the Middle East, Africa and South Southeast Asia,” he said, giving the example of some medtech companies currently carrying out clinical trials in the UAE.
And as for the question of whether a slew of lucrative deals will open up markets in countries who have not yet normalized ties with Israel, such as Saudi Arabia, al-Binali is certain that it is only a matter of time.
“There’s clear curiosity,” he said, describing how businesspeople from those countries, including Saudi Arabia, are expressing an interest in meeting with their Israeli counterparts in the UAE.
“I’ve seen it in Dubai, Saudis who are visiting want to start having that discussion.”
Despite the long antipathy between Jerusalem and Riyadh, al-Binali believes that a thaw is inevitable. “Look, I think it’s going that way. I mean, let’s look at what is happening now, you have [Israeli airline] overflight rights and that means the mind is open,” he observed. “How and when we will get there is not clear to me, but I feel strongly that it is not a question of if; it depends on the Saudi leadership. They will decide based on their interests the best timing.”
Between Israelis and Emiratis, al-Binali said, “there are still personal reservations on both sides, but in general, the societal move overcomes any personal reservations, and people are just curious.”
As for his progress so far with OurCrowd, which is the first venture capital company to be licensed in the UAE, al-Binali said he has been afforded significant flexibility in developing operations in the Gulf, and that several big projects are already in the works, including a global AI innovation center and a new incubator.
“Of course, there is potential for disagreements and working together is still a challenge, but I also believe there are some great opportunities,” concluded al-Binali, pointing to global events such as changes in the U.S. equity market, growing inflation and the Russia-Ukraine war. “You’re going to see contraction, but on the flip side oil has just gone through the roof, which means the coffers of the sovereign wealth funds in the Gulf will be filled out, and there’ll be pressure on them to expand their investment programs.”
