Thursday, November 23, 2017

Carlyle Bullish on Saudi Arabia prior to Prince's Detention

Carlyle Group co-founder David Rubenstein said the following a week before the Saudi Prince purge began:

"I have been in Saudi Arabia for more than 25 years and I am already investing in Saudi Arabia, but the atmosphere is now more encouraging and will encourage more capital attraction."
The wealthy Saudi Arabian Bin Laden family began investing with Carlyle in 1995.

In 2000 George Bush Sr and John Major traveled to Riyadh to talk with senior Saudi businessmen (on behalf of Carlyle). 
In 1991 Carlyle landed one of Saudi Arabia's wealthiest Princes:

Prince al-Waleed bin Talal of Saudi Arabia pondered the notion of spending a spare half-billion dollars. Then last month, on the recommendation of American advisers, he used the money to buy up a sizable piece of America's largest banking company, Citicorp. 
The advisers were the Carlyle Group -- not a familiar name on Wall Street, certainly. In fact, its only New York connection is that it takes its name from the city's famed luxury hotel, a favorite of the Carlyle partners. 
The Carlyle Group, relatively new and based in Washington, is led by people with little experience in the investment business but with strong connections, especially in Washington. 
David Rubenstein is the consummate salesman.  He had this to say in 1991.

Whether the deal with the Saudi Prince will lead to further business for Carlyle remains to be seen. But Carlyle has hopes: "We were mostly interested in developing a relationship with him that might lead to other things in the future," Mr. Rubenstein said. 
It's not clear if Prince Alwaleed bin Talal is one of Carlyle's 1,750 investors from over 82 countries.
Rubenstein has not publicly said if he is worried about the billionaire Prince, however a $1.3 loan to Kingdom Holdings has been held up due to the Prince's detention.

A senior banker at a Saudi financial institution, said the loan deal would not go ahead until the situation facing the prince was resolved.
Also in October PwC and UBS referenced the billionaire prince in a study on the undetained super rich.  
The allegations against Prince Alwaleed, who owns 95 percent of Kingdom, include money laundering, bribery and extorting officials, a Saudi official has previously told Reuters. 

The question is how intertwined are Carlyle and the detained prince?   The Carlyle Group settled more than one bribery allegation in the past.  Will the Prince come out as unscathed as Carlyle?  Will he endure a purge like Libya's Saif al Islam Gaddafi, another Carlyle Group courtee?

Might The David Rubenstein Show on Bloomberg TV entertain any of these questions?  Only the host knows for sure.

Update 11-25-17:  NYT Columnist Thomas Friedman spoke to new prince in charge with a "firehose of new ideas."  Friedman sees changes in Saudi Arabia as their Arab Spring.  Friedman made no mention of Prince Alaweed bin Talal but he wrote. the mood among Saudis he spoke with was: “Just turn them all upside down, shake the money out of their pockets and don’t stop shaking them until it’s all out!”  Who will end up with bin Talal's Citi, Four Seasons and Kingdom Holdings shares?  How do those fall out of the pockets of someone hanging upside down?    I'm not sure how Friedman sees freedom arriving under a barrage of torture reference.

Update 11-26-17:  Bloomberg reported a second deal is held up as a different billionaire Saudi Prince is detained in the Ritz-Carlton.

Update 12-3-17:  CNBC noticed om 12-1-17 what PEUReport observed.  No friends of Prince bin Talal have spoken out on his behalf.

Update 12-7-17:  Bloomberg did a piece on the Saudi crackdown but no word yet from Bloomberg TV's David Rubenstein.

Update 12-9-17:  NPR noted "detaining a key international financial player of Alwaleed's stature could harm potential investment in Saudi Arabia."  Has David Rubenstein changed his mind on Saudi Arabia being an attractive place to invest?  He's been busy ending a different relationship, given his divorce from wife Alice Rogoff.  Did he divorce Prince Alaweed bin Talal as well?

Update 12-4-18:  U.S. Senators heard evidence of the Crown Prince's ordering the murder of a Saudi journalist.  Carlyle's Rubenstein will speak at Indiana University's upcoming commencement.  The university's motto is "Truth and Light." 

Update 10-9-21:   The Khashoggi murder is such old news that the man behind the execution is being promoted for his public service by Crown Prince bin Salman.  Further evidence that Khashoggi's brutal killing is in the rear view mirror came from bin Salman led Saudi Public Investment Fund's purchase of Newcastle United.