Saudi Arabia seals acquisition of 15% stake in London’s Heathrow

Saudi Arabia’s Public Investment Fund concluded its yearlong quest to buy a chunk of London’s Heathrow Airport, joining an ownership group that includes the sovereign wealth funds of Qatar and Singapore.

The PIF will own a 15% stake in FGP TopCo, the holding company that controls Europe’s busiest airport, after the deal was finalized on Thursday. The Saudi fund bought into Heathrow at the same time that Paris-based private equity firm Ardian acquired a 22.6% stake in the airport, which has a market value of about 8.7 billion pounds, or  $11 billion.

“Heathrow acts as a crucial gateway to the world, and we look forward to supporting Heathrow’s management in its efforts to secure the sustainable growth of the airport and to continue to maintain its position as a global aviation hub,” Turqi Al-Nowaiser, PIF Deputy Governor and Head of International Investments, said in a statement.

The Saudi fund, which manages some $930 billion in assets, has acquired a range of holdings in the U.K. that includes the Newcastle United football club and large stakes in Selfridges department store and the Rocco Forte luxury hotel group.

Among Heathrow’s owners are the Qatar Investment Authority, which holds a 20% interest, Singapore’s GIC sovereign fund and the Australian Retirement Trust.

Singapore’s DBS bank sees Dubai as hub for Mideast expansion

Singapore’s DBS Group Holdings, the largest bank in Southeast Asia, is spreading its wings and eyeing Dubai as a springboard for expanding activities in the Middle East.

“There’s an opportunity to scale it up,” CEO Piyush Gupta told Bloomberg during an interview in the UAE financial center this week. “We’re revisiting the thesis that there is real opportunity to do more stuff out of Dubai and this region.”

Both Dubai and Abu Dhabi have emerged as attractive bases in the MENA region for hedge funds, investment banks and other financial firms.

International businesses appreciate the ease of doing business in the UAE, the low taxes and the Gulf state’s position as an international travel hub.

GoldenTree Asset Management and Millennium Management are among the New York-based hedge funds that have recently set up shop in Dubai.

Singapore’s $288 billion Temasek sovereign wealth fund has also made several co-investments with Mubadala and other UAE institutions.

Mubadala-backed Shein plans for super-sized London IPO

Fast fashion disruptor Shein is planning to confidentially file for a London public listing as soon as this week, Sky News reported, the first step in a super-sized initial public offering in the U.K.

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. 

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, although a confidential filing does not necessarily mean a share sale is imminent. The filing will allow Shein to list more quickly if the company decides to move ahead on a market debut.

The 15-year-old company, which also counts venture capital group Sequoia China and private equity group General Atlantic as major backers, was valued at $66 billion in a funding round a year ago. 

While Shein did not invent the technology to help it predict rising fashion trends, the platform to give near real-time data to suppliers — who are mostly in China — created its unique “on-demand” production model, according to Business Insider, which looked into its production practices.

The data sharing allows for a fast turnaround from small order runs to much larger orders when an item is selling well, and to quickly drop an item when it isn’t.

The tight control it keeps over its supply chain has revolutionized fast fashion in recent years, making Shein more in demand among consumers than competitors like Zara and H&M.

Price is another factor in its popularity. McKinsey found the average cost per item from Shein is $14, while Zara is $34.

Apollo’s Marc Rowan: Best investors in UAE, Singapore

Apollo Global Management CEO Marc Rowan said the world’s best investors now operate in places such as the UAE and Singapore, criticizing American funds for being too focused on benchmarks.

Apollo and other private equity firms are increasingly turning to the Middle East and Asia as deal-making activity dwindled last year due to higher interest rates.

At the start of his career, Rowan “thought the single best investors in the world were in the U.S.,” he said in a nearly hour-long interview on Tuesday with David Rubenstein at the Economic Club of Washington, D.C. “That’s no longer the case.”