How Much is Available?

Over $10 trillion is available, of which only $1 trillion has already been spent abroad by Middle East investors

Middle East investments in the UK already amounts to over £10 billion and in the USA, 20% is now owned by investors based in the Middle East.

The UK market is an important international hub providing stability, depth and a variety of investment vehicles. It is fully capable of handling the billion dollar wealth of even the richest Gulf royal family members and entrepreneurs giving the investors’ confidence their contribution will be used judiciously.

The numbers involved in these deals are still small compared with the billions being spent in the region. Bankers in the Mideast, however, say both governments and family companies controlled by Gulf billionaires are becoming more adventurous.

See the report below in the Financial Times to assess the importance of Middle East investors:
http://www.ft.com/cms/s/0/bc3dd898-af87-11de-ba1c-00144feabdc0.html

Mideast money is definitely venturing abroad. For starters, a chunk of the billions is going to deals in the U.S., Europe, and Asia. Dubai Ports did not just cut a deal for P & O: It also bought the port operations of Florida's CSX Corp. for $1.2 billion. Last year, Dubai luxury hotel group Jumeirah bought the swanky Essex House in New York for an estimated $400 million. Dubai International Capital, the private-equity arm of Dubai Holding, the government's oil money depository, paid $1.5 billion for Madame Tussauds, the British wax museum, and an additional $1.2 billion for a 2% stake in DaimlerChrysler. Mubadala Development Co. of Abu Dhabi acquired a 5% holding in Italian carmaker Ferrari. In the biggest Mideast deal of all, Egyptian cellular operator Orascom Telecom Holding formed a consortium to buy Wind, a top Italian mobile network, for $13 billion. "These investors have an incentive to invest in assets outside the petroleum industry," says Thomas J. Barrack Jr. His Colony Capital LLC recently partnered with Saudi Prince Alwaleed bin Talal to buy the Toronto-based Fairmont Hotels & Resorts Inc. for $3.9 billion.

On the Hunt

Beat Naegeli, the Dubai-based head of Credit Suisse Dubai private banking in the region, says big Arab investors, while still predominantly invested locally, are increasingly on the hunt for equity stakes in overseas companies and real estate deals in New York, London, and Paris. Many of these investors, he says, are currently expanding their private-equity positions rather than putting money into hedge funds -- a good way to diversify. Abu Dhabi and Dubai have multibillion-dollar funds that are scouting for equity investments abroad. “We will see more of this; this is just the tip of the iceberg.” Brad D. Bourland, chief economist at Riyadh-based Samba Financial Group: Source: Saudi American Bank.

The numbers involved in these deals are still small compared with the billions being spent in the region. Bankers in the Mideast, however, say both governments and family companies controlled by Gulf billionaires are becoming more adventurous. Beat Naegeli, the Dubai-based head of Credit Suisse Dubai private banking in the region, says big Arab investors, while still predominantly invested locally, are increasingly on the hunt for equity stakes in overseas companies and real estate deals in New York, London, and Paris. Many of these investors, he says, are currently expanding their private-equity positions rather than putting money into hedge funds -- a good way to diversify. Abu Dhabi and Dubai have multibillion-dollar funds that are scouting for equity investments abroad. "We will see more of that," says Brad D. Bourland, chief economist at Riyadh-based Samba Financial Group, a leading Saudi bank. "This is the tip of the iceberg."

Then there's the Mideast money flowing into U.S. Treasury securities and other passive investments. U.S. government data indicate that OPEC countries held only $67 billion in Treasuries as of December. Most of that was held by the Gulf States, but it's small compared with the giant holdings of China and Japan.

The private wealth of the Gulf Cooperation Council (GCC) member nations held abroad is reckoned at well over $1 trillion

and, understandably, competition for a slice of the lucrative GCC pie is intense. The private wealth abroad of Saudi Arabians alone is conservatively estimated at $700bn. Arab investment abroad is split respectively 60/30/10 between the US, Europe and other markets.

Arab investments in the UK already amount to tens of billions of pounds.
The English capital is an important international investment hub, providing stability, depth, and a variety of investment vehicles. It is fully capable of handling the billion-dollar wealth of even the richest Gulf royal family members and entrepreneurs.

GULF COOPERATION COUNCIL INVESTMENT OVERVIEW

* GCC private wealth abroad totals about $1.2 trillion.

* This represents about 85% of GCC high net worth individual wealth.

About 15% is invested domestically in the GCC.

* The primary reason for investment outside the region is limited domestic investment opportunities in the GCC.

Source: Saudi American Bank