Prince Al-Waleed’s Vast Fortune

Prominent Lineage

• Both of Al-Waleed’s grandfathers were prominent world figures.• His maternal grandfather, Riad Al Solh, was the first Prime Minister

of Lebanon.• His paternal grandfather, Ibn Saud, was the man who founded Saudi

Arabia• Al-Waleed attended college in the United States, and gained exposure

to the Western way of life and its business practices.• He earned his B.S. from Menlo College in 1979.• He earned his M.S. from Syracuse University in 1985.

Going into Business

• After earnings his bachelor’s degree, Al-Waleed returned to Saudi Arabia and quickly accumulated a small fortune by focusing on construction contracts and real estate during the Saudi oil boom.

• He then moved on to acquire some smaller failing banks and turning them around over a number of years.

Shrewd Stock Investments

By far the most important investment of Al-Waleed’s career came in 1991 when he made an investment in the predecessor of Citigroup (NYSE: C). The company was suffering from failed investments in real-estate and Latin America.

According to Bloomberg, Al-Waleed paid a split-and-spinoff-adjusted price of $2.98 per share. That’s a 1,500% return given the stock’s current price, and an annual return of roughly 13% per year. And that’s without including dividends!

In 2008, during the worst days of the financial crisis, Al-Waleed upped his stake to 5% of the company’s shares. Today, that stake would be worth $7.2 billion.

Diversification of Business

As Al-Waleed accumulated his vast wealth, he formed Kingdom Holding Company. Under this umbrella, he entered many industries, including:• Hotels and Hotel Management• Media and Entertainment• Agriculture • Petrochemicals• Aviation• Technology• Real Estate

Current Investments of Note

Besides Citigroup, Al-Waleed has many other current investments in U.S. firms, though the amount of the investment can sometimes be difficult to discern.

• The largest of those holdings is News Corp. (Nasdaq: NWSA), parent company to Fox, Fox News, Fox Sports, and a host of international media outlets. He is the second-largest voting shareholder in the company behind the founding Murdoch family.

• The most notable of those recent investments was in Twitter (Nasdaq: TWTR), in which he invested $300 million from early investors before the company went public. This is typical of what seems to be his more recent investment trends: fast-growing technology companies.

Why So Mad?

Despite all of this, Al-Waleed has gotten the most press in the past two years for his feud with Forbes.• In 2013, Forbes estimated his net worth

at roughly $20 billion, which was $9.6 billion less than he said he was worth.

• Subsequently, Kingdom Holding Company said that it had “severed all ties” with Forbes—though the publication continues to include him on their list of the world’s richest people.

• Kingdom Holding also brought a libel suit against Forbes in London.

So Who Is Right?

On One Hand

• Forbes claims that Al-Waleed sent representatives to their headquarters to guarantee his rightful spot on the list, which is odd for such a frivolous list.

• Forbes isn’t the only media outlet to question Al-Waleed’s fortune, The Economist voiced its doubts about the source of his income back in 1999.

• Forbes showed how stock of Kingdom Holding shot up an average of 41% in the 10 weeks prior the “World’s Richest” list being published. This made Forbes question the possibility of market manipulation.

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So Who Is Right?

On the Other Hand

• Al-Waleed claims that he is more displeased with how Middle Eastern business and the Saudi Arabian stock market in general is portrayed—rather than his overall standing on Forbes’ list.

• Some of Al-Waleed’s former business partners claim that valuing a Saudia Arabian business—or individual—is extremely difficult because of differences in traditional Western markets and the Middle East.

• Specifically, they point to Al-Waleed’s vast real estate holdings in Saudi Arabia as far more valuable than Forbes could have estimated.

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In the end…

This definitely qualifies as a “billionaires-only” type problem.

The valuable takeaways remain that, like Warren Buffett, Al-Waleed has invested in companies that are in a certain amount of distress, and has a much longer holding period than most Wall Street professionals.

Unlike Buffett, Al-Waleed likes to focus on high-growth, cutting-edge technology companies.

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Warren Buffett's biggest fear is about to come true