Year after Khashoggi murder, investors embrace Saudi Arabia

A year ago today, journalist Jamal Khashoggi walked into the Saudi consulate in Istanbul and never emerged. In the wake of his gruesome murder, major U.S. investors and executives from Uber and Google boycotted the regime’s annual investment conference, dubbed “Davos in the Desert”; prominent U.S. lawmakers proposed bills to halt arms sales to the kingdom and asserted that Crown Prince Mohammed bin Salman “has got to go”; and experts anticipated that foreign investment in the country would plummet.

What a difference a year makes.

At least 40 executives from U.S. companies, including Goldman Sachs, JPMorgan Chase, and Citigroup, will attend the kingdom’s Future Investment Initiative event in Riyadh later this month. Also attending will be Trump adviser and son-in-law Jared Kushner, as well as BlackRock’s Larry Fink, who boycotted last year’s event. Fink explained his decision in a post on LinkedIn: “I believe greater economic integration and diversification will help Saudi Arabia build a more modern and sustainable economy for all of its citizens,” he wrote, adding that “corporate engagement and public dialogue can help with that evolution.”

Some major tech investors and executives are still staying away, including those from Google, Uber, and Amazon (whose CEO, Jeff Bezos, attended a vigil for Khashoggi today, which is understandable since Khashoggi was a writer for the Bezos-owned Washington Post). But not everyone is avoiding the conference–early Facebook investor Jim Breyer and Magic Leap’s chief product officer are both expected to attend, according to a list obtained by the Washington Post.

Breyer declined to comment through his spokesman, Matt Benson. Magic Leap spokeswoman Julia Gaynor also declined to comment.

As for tech startups, they aren’t exactly spurning the kingdom when it comes to investments. For instance, British health tech company Babylon raised $550 million in August in an investment round backed by Saudi Arabia’s massive sovereign wealth fund. The London-based company said Friday that it was now worth $2 billion following the fundraising, which also saw German reinsurer Munich Re’s ERGO Fund and an undisclosed U.S. health insurer–which a Sky News report identified as Centene–invest.

Meanwhile, the U.S. just announced plans to send additional troops along with enhanced air and missile defense systems to Saudi Arabia and the United Arab Emirates, on top of an $8.1 billion sale of weapons (including precision-guided bombs and related components) to those countries pushed by the administration earlier in the summer. Secretary of State Mike Pompeo visited MBS, which shows no signs of leaving or resigning, for a friendly chat back in June, and President Trump dismissed a UN request for the FBI to investigate the murder, despite the fact that Khashoggi was a U.S. resident.

And foreign direct investment into Saudi Arabia increased in 2018 (from $1.4 billion in 2017 to $3.2 billion), though it has dipped in the past year due to lower oil prices and investors turned off by its continuing military campaign in Yemen.

To top off the bitter irony, “Davos in the Desert” is being held this year at the Ritz-Carlton in Riyadh–that’s the hotel where MBS infamously detained hundreds of rich and powerful Saudis in 2017 as part of an “anti-corruption campaign.” Though most of them were eventually released, some of them are now in real jail, the maximum-security Al-Ha’er prison about 25 miles south of the capital.

Written by Investors Wallets

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