The Weekly Circuit: Private equity booms in Riyadh + Africa attracts UAE banks

👋 Hello from the Middle East! 

This week we’re looking at Africa’s attraction for Gulf lenders, Saudi Aramco’s plans in China, the Barakah nuclear plant’s approach toward full-scale operation in the UAE and competition for the pro tennis ATP Tour from Saudi Arabia, UAE and Qatar. But first, corporate buyouts proliferate in Riyadh.

Private equity investing is blasting off in Saudi Arabia. After crossing the $1 billion threshold in 2022 and growing nearly 6X in the prior year, the industry quadrupled to $4 billion in 2023 across 30 deals, according to new data from Magnitt.

The kingdom is at a “pivotal intersection,” Huda Al Lawati, Founder & CEO of Gulf-based manager Aliph Capital, said in Magnitt’s report. She said Saudi Arabia’s traditionally entrepreneurial private sector is meeting with economic diversification efforts led by the government to create a flood of investment opportunities and potential for growth, providing opportunities in tourism, sports, and logistics. 

Buyout transactions have been the main driver of private equity growth from 2020 through 2023. Saudi Arabia’s Public Investment Fund accounted for the largest number of transactions, totaling 18, most of which were reported in 2022 and 2023. Active investors with four-plus deals done are all Saudi-based firms: Asyaf Investments, GAIC, and BATIC, according to Magnitt. Newer players in PE in the kingdom with two to three deals completed include Investcorp, Marek Capital and Blominvest. 

Saudi Aramco, the world’s largest oil company, sees China as vital to its future business growth. Speaking at the China Development Forum 2024 in Beijing on Sunday, Aramco President and CEO Amin H. Nasser cited data showing that oil demand will continue to be robust in the world’s No. 2 economy. He also pointed to joint interests in renewable energy and materials manufacturing. “We are not mere investors, and China is not just a market to us,” Nasser said. “We want to be a partner of first resort in China’s economic development journey, as new opportunities clearly come into focus.”

A new interview with the UAE’s foreign investment chief puts the country’s assets abroad, both government and private, at an estimated $2.5 trillion at the start of this year. Jamal Bin Saif Al Jarwan, Secretary-General of the UAE International Investors Council (UAEIIC), also told the Emirates New Agency WAM that the portfolio is doing well despite economic headwinds. The UAE’s international investment footprint is divided between sovereign wealth funds holding 72% of the assets, Al Jarwan noted. Abu Dhabi Investment Authority (ADIA) is the leading foreign investor. He singled out a 2023 deal between U.S. private equity firm Apollo and ADIA to acquire chemicals manufacturer UniVar for $8.1 billion as the “most prominent.”

Amid growing interest in Africa’s prospects for economic development, four UAE banks – First Abu Dhabi Bank, Mashreq Bank, Abu Dhabi Commercial Bank and Emirates NBD Bank – were among a pool of lenders that helped Africa Finance Corp. raise a $1.2 billion syndicated loan to build infrastructure and create jobs. Investment is also pouring into Egypt since the UAE announced a $35 billion financing package last month. Compass Capital, an Egyptian private equity fund, and CI Capital investment bank are launching their joint $644 million C3 fund that aims to acquire significant stakes in publicly traded Egyptian companies.

Egypt plans to stockpile essential food, fuel and medicine to ensure their affordability and availability as its economy comes back from the brink. Following announcements of billions of dollars in financial aid from sources including the UAE and the World Bank, the decision to cache basic supplies came during a meeting led by Prime Minister Mostafa Madbouly, Daily News Egypt reports. Residents in Cairo told Bloomberg that despite interventions, many are still bracing for more hardship to come. 

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].

DIGITAL DIPLOMACY

U.S. is ‘most important partner’ in AI, UAE envoy Al Otaiba says

A new report from the UAE Embassy in Washington sheds light on cooperation between the two countries in artificial intelligence, The Circuit’s Kelsey Warner reports.

Critical tech: Generating billions in investment dollars around the globe, AI has become a foundational technology for the UAE’s economic diversification efforts. Partnerships with some of the biggest American institutions in technology and science, including Microsoft, Nvidia, IBM and NASA, are critical to those efforts, according to the embassy. 

Future-proofing: “Moving from oil to data, from sand to space, from commodities to ‘compute’ – the UAE is rapidly remaking its economy and racing into the future,” Yousef Al Otaiba, the UAE Ambassador to the U.S., writes in the opening letter of the white paper. “The United States is the UAE’s most important partner in this transformation.”

Click here to read the full story.

CHARGED UP

Saudi Arabia invests another $1 billion in EV start-up Lucid

Less than a month after Lucid’s CEO said the electric car start-up must not rely on the “bottomless wealth” of Saudi Arabia, its biggest backer, the company is raising $1 billion from Ayar Third Investment Co., a unit of the Saudi’s Public Investment Fund, The Circuit’s Kelsey Warner reports. 

EV player: The PIF, which has a 60% stake in Lucid, opened a factory in the kingdom last year and has poured billions into the California company as it looks to become a significant regional manufacturer.

Stock jump: Shares in Lucid jumped as much as 18% on the news that Ayar will buy $1 billion worth of stock amid lower-than-expected demand for luxury EVs. But investors’ mood quickly cooled and the price has settled back at around $2.75, erasing gains. 

Click here to read the full story.

Mubadala: ATIC Third International Investment Co., a unit of Mubadala, will buy close to $500 million of shares in Anthropic, a challenger to OpenAI, from the estate of bankrupt crypto exchange FTX. Mubadala said on Tuesday it participated in a $120 million fundraising round by Indian student loan firm Avanse through its affiliate Alpha Investment Company. Mubadala on Monday announced it has agreed to acquire KELIX bio, a specialty pharmaceutical business focused on delivering complex generics across emerging markets.

Oman Investment Authority: The OIA announced on Wednesday the “Future Fund Oman” with initial capitalization of $5.2 billion to be deployed over the next five years at the rate of $1 billion annually. The fund will allocate 90% to new or existing large-scale projects located in Oman. It will also allocate 7% of its capital towards small and medium-sized enterprises and the remaining 3% in startups.

Public Investment Fund: The men’s ATP pro tennis tour has opened a bidding process for an additional top-level tournament, bringing unexpected competition from the UAE and Qatar to the PIF and Saudi Arabia for hosting rights to the event, The Athletic reports. The PIF-backed Professional Fighters League hired Jerome Mazet as general manager of PFL MENA, the mixed martial arts exhibition tour set to launch later this year.

International Holding Co.: International Resources Holding, a unit of Abu Dhabi-based IHC, is interested in acquiring Zambia’s Lubambe Copper Mine, an asset that China’s JCHX Mining has already agreed to buy, Reuters reports.

Mumtakalat: Bahrain’s sovereign wealth fund reported that it has become sole shareholder of British supercar maker McLaren Group.

Qatar Investment Authority: France’s 87-year-old UGC Normandie Cinema on the Champs Elysees in Paris may shut down unless it can negotiate a lower rent with the QIA, its landlord.

🏢 Aiming High: Aldar, Abu Dhabi’s largest publicly traded property developer, aims to increase sales to $8.4 billion this year and plans to issue a second round of green Islamic bonds, Chief Financial and Sustainability Officer Faisal Falaknaz told The National in an interview.

🏖️ Waterfront Wealth: Dubai’s Samana Developers said it will invest $3.4 billion in 18 residential projects this year, including several in the city’s booming waterfront development sector.

🌴 Rising Interest: The emirate of Ras Al Khaimah raised its stake in RAK Properties to 34% from 5% after shareholders approved a rights issue and added $250 million to the developer’s capital base.

💼 Office Space: Adam Neumann has bid to buy back WeWork for more than $500 million, the Wall Street Journal reports.

🤝 Sealing the Deal: Apollo Global Management finalized a deal with UBS to buy Credit Suisse’s former securitized products business Atlas SP, as the Swiss bank continues the integration of its former rival, the Wall Street Journal reports. Apollo will also buy $8 billion of senior secured financing facilities from UBS, the bank said.

🏗️ Port Project: Turkey’s Doğuş Group signed a preliminary agreement to build a logistics industrial zone in Egypt’s Jarjoub port on its northern Mediterranean coast that is projected to pump $7 billion into the economy and generate 20,000 jobs.

🚰 Water Treatment: France and the EU signed financing agreements worth 62 million euros ($67 million) to support the development of the Yellow River Water Treatment Plant project in Egypt.

🚚 Logistics Support: Tristar Transport, a Dubai-based energy logistics firm, has revived efforts to sell itself to investors after scrubbing an IPO three years ago, Bloomberg reports.

🪧 Buying Billboards: BSA, one of the UAE’s top outdoor advertising companies, has acquired Aldar Advertising and expects to expand its business by 30%.

🤖 AI Accountant: FundGuard, an Israeli accounting platform for AI investment, raised $100 million in a Series C financing round led by Key1 Capital.

🏢 U.S. Expansion: Dar Global, the global arm of Saudi developer Dar Al Arkan, plans to buy property in Miami and New York, CEO Ziad El Chaar told The National.

💵 Trading Office: Gemcorp Capital will open an Abu Dhabi office this year as the London-based hedge fund boosts investment in Africa and other emerging markets, Bloomberg reports.

🖥️Nefarious Links: SpaceX’s Starlink is being widely used in Yemen, including by Houthi rebels, according to an investigation by Bloomberg that looked at the worldwide use of the satellite internet service on the black market.

👵🏼 Senior Moment: Dubai expects an influx of expats planning retirement in the emirate following the waiver of a AED 1 million ($272,000) up-front payment required for a 10-year Golden Visa.

💬 Language Police: Meta’s oversight board called on the Facebook owner to end its ban on the Arabic word “shaheed,” or martyr in English, saying the rule was “overbroad” and suppressed the speech of millions of users.

🧮Homework Help: The UAE Ministry of Education is partnering with Alef Education, an Abu Dhabi-based EdTech company, to develop an AI tutor for school-aged math.

April 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.

April 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. 

April 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.

April 16-18, Dubai, UAE. Middle East Energy. Energy leaders gather to debate and shape the future. Dubai World Trade Center.

April 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.

April 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.

April 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.

April 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.  

April 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.

April 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 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.