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The Great Investors: Prince Alwaleed Comments

Kelly Summers   |   April 24, 2008
Prince Alwaleed bin Talal bin Abdul Aziz Al Saud, the son of the Saudi Arabia king�s brother, has many names and titles. He is the richest Arab by Power 100 - The World´s Most Powerful Arabs 2008, the most successful Arabian businessman, and sometimes even called �Arabian Warren Buffett.� Prince Alwaleed is known for his donations on education and charity, as well as for being the first person in the world to buy A380 Superjumbo, the biggest passenger aircraft, for personal flights.

And don�t sneer that he is the Arabian king�s nephew and got all his wealth for free. Prince Alwaleed is one of those self-made persons (in his Forbes profile, where he is listed as #8 richest person in the world, the line Fortune reads �self made�). Alwaleed earned his $20 billion from investments. You will be surprised, but many world-known companies in various sectors partially belong to the Arabic prince.

Alwaleed obtained his degrees from American Menlo College (Calif.) and Syracuse University. After graduating from the Menlo College in 1979, Prince executed his first deals with foreign companies wishing to work with Saudi Arabia. Alwaleed�s initial capital comprised $30,000 from his father and $300,000 from the mortgage on his house. In 1980 Alwaleed concluded contracts on land purchase and invested in Saudi Arabia banking industry, which was very much undervalued at that time. In the same year he started his own investment company Kingdom Holding Company, which has been traded on the Saudi Stock Exchange for less than a year now (see the chart in Saudi Arabia Riyals) and is the Saudi Arabia�s biggest company.

Serious investment activities of Prince started in the 1990s, when he bought the stocks of Citicorp when the American firm was hard up. Alwaleed then spent $550 million on relieving the Citibank from difficulties, and now his stake in the company makes half of Prince�s wealth - $10 billion. Alwaleed invested significant amounts in other big companies, including AOL, Apple Inc., Worldcom, Motorola, News Corporation Ltd and other media and technology companies. Hotel businesses attracted Prince as well. He presently owns stakes in such hotel chains as Hotel George V, The Plaza, Fairmont Hotels and Resorts, Four seasons, Movenpick, and in the entertainment monster Walt Disney.

Thus, the international portfolio of his investment company brought Prince his billions. If you look at the investment principles of KHC, it becomes clear why Alwaleed was titled �Arabian Warren Buffet.� When picking investments, his company pays attention to high quality assets and management, undervaluation of assets, and manages the geographical focus in order to take advantage of the evolving global investment climate. Moreover, Alwaleed�s company prefers to make long-term investments and tries to cooperate closely with management of the companies and to participate in strategic decisions, as it believes that such an active approach increases the portfolio returns. KHC also tries to diversify its investments across sectors and geography, which is also reflected in its portfolio.

Prince Alwaleed is also known for his donations, for the purpose of which he gives away $100 million yearly. Most of the donations are aimed at bridging gaps between Western and Islamic communities, e.g. funding American studies in Middle East universities and Islamic studies in American colleges. In 2001, Alwaleed offered $10 million to help victims of 9/11 attack, but the mayor Giuliani refused to accept the money because of the Prince�s comment that the USA should review its policies towards the Middle East. In 2005, Alwaleed donated $20 million to Paris� Louvre, which became the biggest donation in the history of the world�s largest museum. This money is now used to build the wing for the vast Islamic art collection of Louvre, which is planned to be opened in 2009.
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