Saudi Arabia's investments extends from US property to scooter startups, disclosure reveals
The venture arm of Saudi Arabia's sovereign wealth fund, Sanabil Investments, has revealed dozens of US and European venture capital and private equity firms in its portfolio, shedding new light on the kingdom’s expanding global economic footprint.
The fund’s portfolio contains 18 startups along with big-name VC and growth funds like California-based Andreessen Horowitz, 500 Global and New York-based, General Atlantic.
According to Sanabil’s website, it invests $2bn per year aiming “to become a globally influential investor in venture, growth and small buyout assets”. Sanabil says it allocates 50 percent of its assets to venture capital, 30 percent to private equity and a fifth to a “liquid portfolio”.
The fund has direct investments in startups across the US and the Middle East, including sellanycar.com, biotech company Atomwise, and the scooter rental app, Bird. It also has a stake in Apollo’s flagship buyout fund and positions in US residential and commercial real estate via asset managers Brookfield, Blackstone, and Cortland.
The disclosures, first reported by The Information, demonstrate the scale of Saudi Arabia’s global economic footprint and the ties between the kingdom and western investment firms.
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Saudi Arabia was treated as a pariah by some western leaders and business executives after the 2018 killing of Middle East Eye and Washington Post columnist journalist Jamal Khashoggi. The CIA concluded in an assessment that Saudi Arabia's Crown Prince Mohammed bin Salman ordered the murder of Khashoggi.
Fast forward five years later, and Saudi Arabia has emerged relatively unscathed.
The war in Ukraine has revived concerns about traditional energy security. President Joe Biden visited Saudi Arabia last summer and the crown prince was later received throughout Europe.
On the business side, western executives and financiers have flocked to the Gulf, which has emerged as a rare bright spot in a global economy under pressure from high inflation, rising interest rates, and more recently, a banking crisis.
Mohammed bin Salman has overseen a severe crackdown on dissent at home but is also pushing through some social reforms designed to make the kingdom more attractive to global investors, as he looks to diversify the Saudi economy away from its reliance on oil and gas.
Saudi Arabia’s economy grew 8.7 percent in 2022, the highest among G-20 countries.
The new Sanabil disclosures highlight how the kingdom’s oil revenue windfall is trickling down outside the Gulf region.
Middle East Eye reported previously that cash-rich property hunters from the Gulf have even been scooping up luxury New York City real estate, chipping into the hold Europeans and South Americans traditionally once had on the city’s market.
'Saudi has a founder'
Saudi Arabia flexed its economic muscles at a gathering in March of tech titans and business deal-makers in Miami Beach, where it pitched itself as a favourable investment destination at a time of global economic uncertainty.
During the conference, Adam Neumann, the co-founder of WeWork, said he was considering launching his new residential real estate company in Saudi Arabia, according to Bloomberg.
At the event, US investor Ben Horowitz - who co-founded Andreessen Horowitz, which the Saudi sovereign wealth fund has invested in - praised the kingdom as a “startup” nation and lauded Crown Prince Mohammed bin Salman as a visionary.
“Saudi has a founder,” Horowitz said. “You don’t call him a founder, you call him his royal highness.”
Saudi’s Public Investment Fund (PIF) is chaired by Crown Prince Mohammed bin Salman and has emerged as the main vehicle for his attempts to overhaul the kingdom's oil-dependent economy.
On Sunday, Saudi Arabia led oil-producers to impose a production cut in order to support energy prices.
Besides startups and VC funds, Saudi Arabia is pouring its oil wealth into mega-projects like the $500bn futuristic Red Sea city Neom and a new airline.
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