Saudi Arabia’s Sanabil Investments, the venture arm of its sovereign wealth fund, has disclosed 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”. It allocates 50 percent of its assets to venture capital, 30 percent to private equity, and a fifth to a “liquid portfolio”.
Wide portfolio
The fund has direct investments in startups across the US and the Middle East, including SellAnycar, 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.
Saudi Arabia’s Crown Prince Mohammed bin Salman (MBS) 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 through Saudi 2030, as he looks to diversify the Saudi economy away from its reliance on oil and gas.
Highest growth among G20
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.
Many 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 Arabia has 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.”
Ben Horowitz
Saudi Arabia’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 to support energy prices.
The kingdom is also investing in mega-projects like the $500bn futuristic Red Sea city Neom and a new airline.
However, 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.
Despite this, 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.
Beyond the startup and venture capital space, Saudi Arabia’s economic reach has extended into other areas as well, such as luxury real estate.
Property hunters
As reported by Middle East Eye, cash-rich property hunters from the Gulf have been purchasing high-end properties in New York City, competing with traditional buyers from Europe and South America. The Sanabil disclosures reveal that the Saudi sovereign wealth fund has stakes in US residential and commercial real estate through asset managers Brookfield, Blackstone, and Cortland.
Despite some lingering concerns over human rights and dissent, Saudi Arabia has made efforts to position itself as an attractive destination for foreign investment. The country’s Crown Prince Mohammed bin Salman has overseen some social reforms aimed at making the kingdom more appealing to global investors, while also pushing for economic diversification away from the traditional oil and gas industries.
The new disclosures from Sanabil Investments highlight the kingdom’s growing economic influence around the world and its deepening ties with western investment firms. While some may still have reservations about the country’s political and social climate, it seems clear that its economic heft is something that cannot be ignored.
As the world continues to navigate an uncertain economic landscape, it is likely that Saudi Arabia and its sovereign wealth fund will continue to play an increasingly important role. Whether this will lead to further criticism and calls for accountability or greater investment and cooperation remains to be seen.
For now, the disclosures from Sanabil Investments serve as a reminder of the kingdom’s expanding global footprint and its growing influence in the world of startups and venture capital.
