Secretive Gulf Family’s $300 Billion Fortune Is About More Than Oil (From Bloomberg Wealth)
~ Tuesday, January 3, 2023 Blog Post ~
By Devon Pendleton, Ben Bartenstein, Farah Elbahrawy, and Nicolas Parasie, December 6, 2022
*The Al Nahyan family owns Manchester City Football Club, a dozen or so palaces and invested big in SpaceX and Savage X Fenty.
*The world’s richest family owns the Manchester City Football Club, a dozen or so palaces and invested big in Rihanna’s Savage x Fenty and SpaceX.
*You’ve also probably never heard of them.
In a region where opulence is on full display, Sheikh Tahnoon bin Zayed Al Nahyan keeps a low profile belying his importance.
That doesn’t stop the whispers about the Abu Dhabi royal, who’s also the top spymaster for the United Arab Emirates: that he’s effectively in charge of large swathes of a family fortune that’s bigger than any other in the world.
With the UAE home to about 6% of the world’s proven oil reserves and known for the concentration of money within royal families, it’s no secret that the Al Nahyans are rich. But investments in everything from Rihanna’s lingerie line and big data to fast food and Elon Musk’s SpaceX have propelled the wealth of the family to new heights.
Their net worth now amounts to at least $300 billion, according to an analysis of their complex holdings by the Bloomberg Billionaires Index that included regulatory filings, real estate records and corporate disclosures. That’s more than the $225 billion attributed to the Waltons, who have long been recognized as the world’s richest family thanks to Walmart Inc.’s retail dominance.
Representatives of the Al Nahyans didn’t respond to multiple requests seeking comment.
Pinning down the precise magnitude of royal wealth is difficult because lines separating family and state are often blurred. In the case of the Al Nahyans — who have ruled the UAE since independence half a century ago — some assets are distinctly private, while others are intertwined with the government. Those clearly personal holdings mean their discernible wealth exceeds other Gulf clans, including the Saudi royal family.
Sheikh Tahnoon — a black belt in jiu-jitsu — operates on both public and private sides. He’s head of the Abu Dhabi wealth fund ADQ as well as the country’s top lender First Abu Dhabi Bank. Among the family’s personal holdings is an investment firm which has seen its value surge almost 28,000% over the past five years. International Holding Co. is deemed too royal to fail by domestic investors familiar with the company, but too opaque for some international institutions to bet on.
The Al Nahyans’ holdings include trophy assets like Manchester City Football Club, a dozen or so palaces including Chateau de Baillon north of Paris, and most of London’s exclusive Berkeley Square. But the crux of the family’s ascent lies with Royal Group, a sprawling web of companies that employs more than 27,000 people in fields from finance to robotics. Over the past two decades, it’s grown from a relatively small operation to command assets worth close to $300 billion, according to people familiar with its operations, who asked not to be identified because the information is private.
As the Al Nahyans’ wealth grows, so does their influence in the region and around the world. Sheikh Tahnoon is recognized as a key mastermind of their growing business empire as well as an important political emissary. Investments in countries such as Turkey and Egypt often support efforts by his brother Sheikh Mohammed bin Zayed, the UAE’s president known as MBZ, to extend the nation’s clout.
Sheikh Tahnoon and MBZ are part of a group of six brothers, known as the Bani Fatima. They’re all sons of UAE founder Sheikh Zayed bin Sultan Al Nahyan from his third, and most prominent, wife. Sheikh Mansour — who serves as deputy prime minister, chairman of the central bank and head of federal wealth fund Emirates Investment Authority — is another key figure, but all contribute to building the family fortune.
Royal Fortune
The Al Nahyans control a vast empire separate from state investment funds
Royal Group acts as a command center for Sheikh Tahnoon, said the people. In addition to investing in an array of companies, it flies in world-class chefs to cook for the family and hires their personal bodyguards, they said.
The company is “the most risk tolerant” of the major investment vehicles in Abu Dhabi, said Richard Clarke, a former White House official and longtime adviser to MBZ. Entities that manage money on behalf of the emirate like Mubadala Investment Co. and Abu Dhabi Investment Authority — with more than $1.2 trillion in combined assets — operate more like traditional, stability-minded sovereign wealth funds.
Sheikh Tahnoon’s superyacht — the family owns at least three, including the world’s largest — is a key point of call for people seeking to do business with the close-knit and elusive family, according to people familiar with the operations. Building a relationship is an important step, and Wall Street titans are eager to pay their respects.
“Why was I excited to see Sheikh Tahnoon?” Tom Barrack, a private equity billionaire close to former US President Donald Trump, said during court testimony. “He’s one of the biggest businessmen in the world.”
During Barrack’s trial — he was acquitted last month of illegally lobbying on behalf of the UAE — the investor detailed his courtship of Sheikh Tahnoon, which included giving him a rare book on Arabian horses and going on a joint biking trip in the Moroccan desert, in an effort to win business for his firm Colony Capital LLC.
“He has every major businessman, sovereign wealth fund investor, operating partner coming through his majlis every night,” Barrack said, referring to meetings held in a traditional Arabian sitting room. Visitors have included billionaires like US real estate titan Sam Zell, Indian industrialist Gautam Adani and Colombian banker Jaime Gilinski.
While Sheikh Tahnoon conducts shuttle diplomacy throughout the Middle East, he’s delegated important responsibilities within his business empire to several trusted advisers. One of the key players is Sofia Abdellatif Lasky, a Moroccan-born financier who’s worked with Sheikh Tahnoon for two decades. She is one of the few expats in Abu Dhabi to rise to such prominence.
“I’ve had exposure to many people in high government positions worldwide,” said Zell, who has known the royal family for some 20 years. “The Abu Dhabi crew, including Sheikh Tahnoon and Sofia, ranks up at the top.”
Some of Royal Group’s investments have increased in value by staggering amounts in recent years. IHC — as International Holding Co. is known — tops that list, outperforming any company globally worth more than $1 billion over the past five years, according to data compiled by Bloomberg.
Meteoric Rise
IHC’s stock has surged almost 28,000% over the past five years
In the process, IHC — majority owned by Royal Group — has catapulted from a little-known investor focused on fish farming to become the UAE’s most-valuable listed company. It’s worth more than blue chips such as McDonald’s Corp., Nike Inc. and Blackstone Inc.
But that size hasn’t enticed international investors, some of whom privately expressed concerns about a lack of transparency. IHC also hasn’t been included in the global MSCI index and isn’t covered by any stock analysts tracked by Bloomberg.
Like other companies listed on Abu Dhabi Securities Exchange, IHC’s interim financial statements receive a review that’s “substantially less in scope” than audits conducted under international standards, Ernst & Young reaffirmed in its latest report on the company’s accounts. Per ADX regulations, its annual reports are fully audited.
While Royal Group has been a sought-after client, most international banks have largely steered clear of doing deals with IHC over concerns about an inflated market value, people familiar with the discussions said. The company, which almost exclusively relies on local financing, trades at almost 18 times its book value, compared with a ratio of about 1.5 for Warren Buffett’s Berkshire Hathaway Inc.
The family’s overlapping interests — including controlling brokers that dominate trading in Abu Dhabi and ADQ’s ownership of the emirate’s exchange — help ensure support for IHC.
In late November, the company issued stock to another Abu Dhabi conglomerate in exchange for shares in businesses including Alpha Dhabi Holding PJSC, the UAE’s third-most valuable company and another listed part of the family’s empire.
IHC didn’t respond to requests for comment. Its shares rose on Wednesday to 409 dirhams (about $111), approaching a record high set last month.
The investment firm’s meteoric rise is emblematic of the growing might of the Al Nahyans and Abu Dhabi. While Dubai long grabbed international attention, the oil-rich emirate cemented its status as the UAE’s dominant player when it bailed out its flashy neighbor for $20 billion in the aftermath of the financial crisis.
The Al Nahyans have since added tourist destinations, including the Ferrari World indoor theme park, a local outpost of Paris’s Louvre museum and a Formula 1 race track.
The UAE, Saudi Arabia and Qatar are all pushing to diversify their economies before the fossil-fuel era ends and are well-positioned to take advantage of opportunities opening up, especially as the US and Europe face higher financing costs and China struggles with Covid.
IHC embodies Abu Dhabi’s global ambition. Chief Executive Officer Syed Basar Shueb said in an August interview that the company plans to invest billions of dollars in markets including Indonesia, Turkey and India, targeting sectors like food, infrastructure and health care.
Like most countries in the developing world, investing and politics go hand in hand, and the Al Nahyans have been active practitioners.
Under MBZ, the UAE has flexed its foreign policy muscle more. The country backed Libyan rebel General Khalifa Haftar, joined the embargo of Qatar in 2017 and embroiled itself in the Saudi-Iran proxy war in Yemen. Yet recently, the UAE has pivoted toward deescalation in the region, a stance that aligns with efforts to expand soft power by making deals.
After Sheikh Tahnoon met Turkey’s President Recep Tayyip Erdogan last year, IHC bought a 50% stake in a Turkish renewable-energy firm. It also invested almost $2 billion in three companies owned by Indian billionaire Adani after the countries signed a trade deal, while ADQ snapped up stakes in key Egyptian companies to help shore up the battered economy.
Group 42 might be the most direct link between business and power in Abu Dhabi. After the UAE and Israel normalized ties, the artificial intelligence company — chaired by Sheikh Tahnoon — became the first Emirati firm to open an office there and has since done deals with state-owned Rafael Advanced Defense Systems.
“Sheikh Tahnoon has become the safe pair of hands for every difficult mission,” said Ayham Kamel, the London-based head of Middle East and North Africa at risk consultant Eurasia Group. “His success has made him an immensely useful player for MBZ and Abu Dhabi at large.”
(An earlier version of this story incorrectly stated that IHC’s annual report, rather than its interim financial statements, received a review that was less in scope than a full audit. Its annual report is fully audited per ADX rules and regulations.)
With assistance from Adveith Nair, Stefania Bianchi, Archana Narayanan, Jack Sidders, Alexander Sazonov and Hayley Warren
Edited by Pierre Paulden, Nayla Razzouk, Chris Reiter and Brian Chappatta
Bani Fatima photographs by Genevieve Chauvel/Sygma/Getty Images, Anwar Hussein/Getty Images, Geoffroy Van Der Hasselt/AFP/Getty Images (3), Yoshikazu Tsuno/AFP/Getty Images, Fatemeh Bahrami/Anadolu Agency/Getty Images and Ishara S.Kodikara/AFP/Getty Images
Royal Fortune photographs by Fatemeh Bahrami/Anadolu Agency/Getty Images, Martin Bureau/AFP/Getty Images, Jim Watson/AFP/Getty Images, Christopher Pike/Bloomberg, Sophie James/Shutterstock, Ali Haider/EPA-EFE/Shutterstock, T.Schneider/Shutterstock, Eitan Abramovich/AFP/Getty Images, Yu Chun Christopher Wong/S3studio/Getty Images, Natalie Naccache/Bloomberg, Joe Prior/Visionhaus/Getty Images and Ingo Wagner/Picture Alliance/Getty Images
Read more: These Are the World’s Richest Families
Sources:
https://www.bloomberg.com/features/2022-worlds-richest-family-abu-dhabi-royals-al-nahyans/
