Prince Alwaleed Takes a Haircut

Prince Alwaleed Loses 19% of Wealth on Global Slump
By Shaji Mathew

Dec. 14 (Bloomberg) -- Prince Alwaleed bin Talal, Citigroup Inc.’s largest individual investor, lost 19 percent of his personal wealth in the past year as the global economic slump reduced the value of banking and property assets, according to Arabian Business.

The Saudi billionaire was ranked the wealthiest Arab with assets worth $17.08 billion as of Dec. 2, the 2008 Rich List, published on the Dubai-based magazine’s Web site today said. That compares with $21 billion a year ago, the magazine reported, citing Alwaleed’s private financial accounts.

“Everyone has been guessing for 20 years” about the assets, Alwaleed was quoted by Arabian Business as saying. “I want you to get it right -- to get it absolutely right.”

Financial firms worldwide have taken $980 billion of writedowns, losses and credit provisions since the start of the current turmoil in the financial markets, according to data compiled by Bloomberg. More than 200,000 jobs have been cut across the industry and the U.S. benchmark Standard & Poor’s 500 Index has dropped 40 percent this year.

Making Money

Alwaleed, a nephew of the late King Fahd bin Abdulaziz al-Saud, stands out among more than 2,000 Saudi princes because he’s made money. After earning a bachelor’s degree from Menlo College near San Francisco, he returned to the Persian Gulf and parlayed an inheritance of less than $1 million into a billion- dollar fortune in the 1980s, mostly through real-estate investments, according to Riz Khan’s biography “Alwaleed: Businessman, Billionaire, Prince” (William Morrow, 2005.) (Meaning no offense, great Prince, but we are a little skeptical of these stated results and methods. - Jesse)

The Prince, 53, built his fortune by investing in brand-name companies he considered undervalued, including Apple Inc., News Corp. and Time Warner Inc. Forbes magazine estimated he was worth $21 billion in March, ranking him 19th among the world’s billionaires.

Alwaleed was lauded by Time magazine as the Middle East’s answer to Warren Buffett, the Sage of Omaha, after his 1991 investment in Citicorp, Citigroup Inc.’s predecessor, helped make the Saudi billionaire one of the world’s five richest people.

This year, Alwaleed’s investments haven’t kept pace with regional benchmarks. The shares of his Riyadh-based Kingdom Holding Co. have slumped 60 percent -- more than Saudi Arabia’s Tadawul All-Share Index or Buffett’s Berkshire Hathaway Inc. Kingdom Holding said Nov. 20 Alwaleed will boost his Citigroup stake, his largest holding, to 5 percent. The bank’s stock has fallen more than 70 percent since Jan. 1.

Assets

Kingdom Holding’s assets are valued at $7.98 billion, while the Prince owns real estate worth $3.196 billion and his media assets such as LBC and Rotana Holding are valued at $1.6 billion, Arabian Business said, citing financial accounts of the billionaire.

“The Prince keeps a significant amount of cash at all times, which is instantly accessible,” the magazine reported, without giving further details.

Alwaleed’s other major assets are valued at $1.679 billion, and include a Boeing 747, an Airbus A380, yachts and 400 vehicles, a collection of jewelry, and investments in a French port and stakes in Lebanese and Palestinian companies.

The billionaire is one of two Middle Eastern investors racing to build the world’s first kilometer-high skyscraper in the Persian Gulf. On Oct. 13, Kingdom Holding announced plans for the Kingdom Tower, part of the $27 billion Kingdom City real-estate project in the Red Sea city of Jeddah.