Prince Alwaleed bin Talal: The billionaire royal
Good Bad Billionaire
This episode explores the rise and controversies of Saudi billionaire Prince Alwaleed bin Talal, often called the 'Warren Buffett of Arabia.'
Key takeaways
- Prince Alwaleed achieved a nearly 20-fold return on his massive investment in Citicorp during the early 1990s.
- A $115 million stake in Apple during Steve Jobs' return grew to over $800 million in just three years.
- The Prince famously sued Forbes magazine for libel after they allegedly undervalued his net worth by billions.
- In 2017, Alwaleed was detained at the Riyadh Ritz-Carlton as part of a Saudi anti-corruption crackdown led by Mohammed bin Salman.
- His investment strategy involves identifying 'distressed' or 'wounded' prestige brands like Twitter (X) and xAI.
Main topics
- Contrarian investing strategies
- Saudi Arabian royal politics
- The Forbes libel lawsuit
Notable quotes
I don't make mistakes, I make blunders.
Conclusion
The episode illustrates the precarious nature of power even for the ul
Transcript preview
Speaker 3 (0:00) This BBC podcast is supported by ads outside the UK. Speaker 2 (0:06) What's it like to see an El Nino on the horizon? I'm Tristan Redmond, one of the hosts of the Global Story podcast from the BBC. And on today's show, we speak to a climate scientist who's worked for the US government predicting extreme weather events like this year's El Nino. Of course I'm worried because I know these extremes impact Speaker 3 (0:24) people and you can't not be worried about that. Speaker 2 (0:27) What does he see coming? Search for the Global Story on bbc.com or wherever you get your podcasts. Speaker 1 (0:43) March 2013, a copy of Forbes magazine lands on a marble desk in Riyadh, Saudi Arabia. It Speaker 3 (0:50) contains that year's Forbes billionaires list, well known to us, the magazine's annual ranking of the world's richest people. Speaker 1 (0:56) A Saudi prince eagerly flips through the pages before stopping at a picture of himself in his trademark tinted glasses and traditional headdress. The Speaker 3 (1:04) Forbes list says the prince has a net worth in the region of 20 billion. billion, making him the 26th most wealthy person on the planet. But Speaker 1 (1:13) the prince is furious. As far as he's concerned, the magazine has undervalued him by around $10 billion. I mean, how dare they? Speaker 3 (1:20) There's only one thing for it. The prince quietly instructs his lawyers to sue Forbes magazine for libel. Speaker 1 (1:28) Welcome to Good Bad Billionaire from the BBC World Service. Each episode, we pick a billionaire and we find out how they made their money. We Speaker 3 (1:34) take them from zero to their first million and then from a million onto a billion. Speaker 1 (1:39) My name is Zing Zing and I'm a journalist, author and podcaster. And Speaker 3 (1:41) I'm Simon Jack. I'm the BBC's business editor. Speaker 1 (1:44) This week's billionaire is Prince Al-Waleed bin Talal bin Abdulaziz Al Saud. Or Speaker 3 (1:49) just Prince Al-Waleed bin Talal for short. Or Speaker 1 (1:52) Prince Al Speaker 3 (1:52) -Waleed for Speaker 1 (1:52) even Speaker 3 (1:53) shorter. Yes, widely recognised as Saudi Arabia's richest royal, Al-Waleed claims very little of his fortune came from inheritance, or indeed the country's vast oil Speaker 1 (2:02) wealth. You can decide that for yourself. Instead, he's earned a reputation as one of the canniest investors on the planet, styling himself as the Warren Buffett of Arabia. Speaker 3 (2:11) That's because Prince Al-Waleed has built a vast fortune by placing high stakes bets on huge global companies. But as every gambler knows, not all bets pay off. Speaker 1 (2:21) Prince Alwaleed has an incredibly opulent lifestyle to match. We're talking lavish palaces, private zoos, mega yachts. He even has a golden throne installed on his private Boeing 747. He's Speaker 3 (2:33) a member of the House of Saud, one of the most powerful royal families in the world. But for our money, he's also a pretty unusual one. Speaker 1 (2:40) So let's sit on the golden throne and fasten our seatbelts as we fly back to where it all started for Prince Alwaleed bin Talal. Speaker 3 (2:51) Al-Waleed was born in 1955 in Jeddah, Saudi Arabia's second largest city after the capital Riyadh. Back Speaker 1 (2:58) then, Saudi Arabia was still a relatively young country, founded just over two decades earlier by the prince's grandfather, King Abdulaziz. Its economy was only beginning to be transformed by the discovery and exploitation of oil. Speaker 3 (3:11) But it was also ultra-conservative, rooted in religion and politically dominated by the royal family. Speaker 1 (3:17) And we can't talk about Saudi Arabia without talking about its human rights record. Because even though the kingdom has become much more socially open in recent years, last year, Saudi Arabia still executed the highest number of people in any given year. Authorities continue to severely restrict freedom of expression and women face widespread discrimination. And the Saudi government has been accused of using investments in international sports and entertainment, known as sports washing, to whitewash its human rights record and improve its global image. Speaker 3 (3:46) However, when defending Saudi Arabia's right to host the 2034 World Cup, Saudi Arabia's sports minister said the claims of sports washing are, quote, very shallow, adding, a lot of the people that accuse us of that haven't been to Saudi or seen what we're doing here. But let's get back to Prince Al-Waleed's beginnings. His father, Prince Talal, wasn't liberal in the Western sense. He was one of Saudi's most prominent voices for reform, in fact. branded the Red Prince, the advocated for constitutional government, greater social openness, more opportunities for women, ideas that seem distinctly radical. there at the time and led him to being politically sidelined. Speaker 1 (4:22) Prince Al-Waleed's mother, Mona al-Saw, was the daughter of Lebanon's first prime minister, but she and Prince Talal divorced when Al-Waleed was young. Now, this meant that the prince spent much of his childhood moving between Saudi and Lebanon, between different homes, cultures. It might even be said different expectations. The Speaker 3 (4:40) story goes that Al-Waleed was a restless child with an annoying habit of running away for days at a time. And after repeatedly getting into trouble at school in Lebanon, Lebanon, his father took the young prince back to Saudi where he enrolled him in a military academy. Speaker 1 (4:53) Now, the runaway prince would later say the academy was where he learnt self-discipline and independence. He's also rumoured to have played Monopoly there every day during his free time. A minor detail that also feels quite on brand for a future investor. Speaker 3 (5:06) Yeah, can Monopoly teach you tricks for building a property empire? I Speaker 1 (5:10) mean, it certainly teaches you how to fall out with your family members. Speaker 3 (5:12) Every single time I've played Monopoly, it's ended up in a massive row. And as to whether it can teach you to be a billionaire, my answer is no. Speaker 1 (5:20) Well, after finishing up at the Academy in Saudi, Al-Waleed went back to live in Lebanon, where it's said he put a lot of effort into drag car racing and generally having a good time, as befits a prince. He'd planned to go to university in Beirut, but the outbreak of the Lebanese civil war in 1975 abruptly put paid to all of that. Speaker 3 (5:38) Instead, and I think this is an important point in the story, he went to Menlo College in California, a private university in Silicon Valley, where else, where he studied business administration. And it gave him something more than a degree because it taught him how to speak the language, if you like, of American business and Western finance. Although he did complain that his social life in California was virtually non-existent. I don't believe him. Speaker 1 (6:01) I find that so hard to believe that Speaker 3 (6:03) a Speaker 1 (6:03) prince in America would have a bad time. Well, the oil boom had been completely revolutionising Saudi Arabia. In 1973, Arab oil producers had turned the world's fuel supply into a weapon because triggered by Western support for Israel and the Yom Kippur War, they slashed oil production, they blocked exports to countries like the US and the UK. And pretty much almost overnight, global oil prices quadrupled and Saudi Arabia was by far the main. beneficiary of this crisis. Speaker 3 (6:30) And in fact, people are referencing that period in the conflicts that we are seeing today. Fueled by surging prices, the kingdom's annual oil revenues rocketed from roughly $4 billion a year to over $100 billion within a decade. In response, the government then used that money to roll out a massive infrastructure programme. Dusty desert towns were being replaced by sprawling modern metropolises, new airports, highways, communication networks, power grids. You get it. They were being built at an astonishing pace. Speaker 1 (7:00) So this was boom times of Riyadh. And after finishing college in California, Prince Alwaleed went back to the newly flushed city. He was now married to his first wife, Princess Dalao bin Saud Al Saud. Like Alwaleed, the princess was a grandchild of the king, although through a different royal line. Speaker 3 (7:16) Yeah, by the time their first son, Prince Khalid, came along in 1978, Saudi Arabia had become a land of enormous opportunity. Yet despite its newfound wealth, it remained a deeply conservative place, both politically and socially. Speaker 1 (7:28) Women weren't allowed to drive or work in most professions. Cinemas were banned. Alcohol was completely off the table. Islamic law shaped public life and the legal system. And while this huge oil boom had transformed the state's finances, it also really strengthened the royal family's power. Speaker 3 (7:45) Yeah, but foreign construction firms were circling the area. They were eager to invest, get in and tap into this newly found wealth. But they needed someone to help them navigate what felt like a mysterious desert country dominated by the royal family. House of Saud. And Speaker 1 (7:59) with his international upbringing, his royal credentials, Prince Awalid was perfectly positioned to slide into that gap. He basically became a very useful fixer for Western investors. Speaker 3 (8:08) Yep, a fixer with very elite connections. And he helped investors from the United States, from Europe, Japan, South Korea, etc. strike major deals in the Saudi construction drive. And it didn't take long before his Speaker 1 (8:19) own wealth started to grow. Speaker 3 (8:21) I Speaker 1 (8:22) mean, you'd be forgiven for thinking that being a Saudi prince would have given him the kind of financial head start in business that most of the rank and file can only dream about. Speaker 3 (8:30) Which gives us an opportunity to dig into one of the first, I would say, controversial aspects of the story about whether he is, in fact, what he would style a self-made billionaire. Because his own explanation of where he found the extra capital to start making his own bets, his own investments, is one he's repeated a few times. According to the prints, his father first of all gave him $30,000, which he spent... in a single year. Speaker 1 (8:51) Then his father apparently gave him a $300,000 loan, which vanished in less than three years. So instead of giving him more money, Awaleed's dad then gave him the deed to a house he'd been building for his son in Riyadh. Speaker 3 (9:03) And he promptly took out a $600,000 mortgage against that property. He said he raised additional funds by selling off a $200,000 necklace belonging to his wife. And along with capital from the property deals he'd brokered, he started relentlessly investing in Saudi real estate, in stocks. in shares. If Speaker 1 (9:21) we ignore the quibbling detail, he also received a $15,000 monthly stipend as a grandson of the king. Quite the allowance. It's a story that almost kind of, you know, nearly supports this idea that he's a self-made man. Not Speaker 3 (9:33) really. Not for me. I mean, you know, Saudi prince, really, self-made man. I would not put him in that category. It's impossible to pinpoint precisely when Al-Waleed reached his first million-dollar milestone. You could say he may have been born as it, but it's safe to say by the early 80s, Prince Al-Waleed bin Talal was comfortably, in his own right, a millionaire. Speaker 1 (10:06) Now, let's continue our chartered voyage through Prince Alwaleed's fortunes as we cross over from a million to his first billion. By Speaker 3 (10:14) the end of