Right – we’re officially declaring a trend: Middle East investors taking stakes in the world’s largest banks.
April 16: Saudi businessman Maan Abdulwahed al-Sanea says that he had built up a 3.1 per cent stake in HSBC
May 1: A fund managed by Dubai International Capital says it has made a “substantial investment” in HSBC
May 15: DIFC investments, the International Financial Centre’s investment arm, says it has built a 2.2 per cent stake in Deutsche Bank
Plus Istithmar, part of the Dubai government’s investment arm, has built a 2.7 per cent stake in Standard Chartered. And, of course, there’s Prince Alwaleed bin Talal’s Citigroup holding.
These investors have many other interests. The Saudi tycoon, before his recent HSBC buy, has taken a particular interest in the UK, including a 29 per cent stake in Berkeley, the housebuilders, among nearly a dozen other British investments. But the HSBC stake marked a move from the previous pattern of relatively low-profile moves abroad.
DIC has already made waves in UK leisure, with the $1.5bn acquisition of the Tussauds Group and a $1.23bn deal for Travelodge. But DIC’s HSBC investment read more like a statement of intent – “the first of a number of planned investments by [the fund] in global Fortune 500 companies.”
Financial institutions of this size offer global name recognition for those seeking to make a splash, in a way that housebuilders do not. For those looking to buy profile, and arguably to establish themselves as a legitimate investment force to be reckoned with, that must seem appealing.
Few other industries obviously offer brands with truly global reach. Technology? Oil perhaps, but that would be far too coals-to-Newcastle.
Plus, with the biggest banks scrambling to boost their presence in Middle East markets, there’s no shortage of opportunities to watch potential prey at work first hand.