The Saudi Prince Who Made a Killing During a Banking Crisis...

[BargainValueHunter]

http://www.nytimes.com/1991/02/22/business/saudi-prince-to-become-citicorp-s-top-stockholder.html

 

Citicorp, the nation's largest banking company, said yesterday that a member of the Saudi royal family, Prince al-Waleed bin Talal, had agreed to invest $590 million, in a deal that will help Citicorp strengthen its finances.

 

The investment will make Prince Waleed the largest single shareholder in Citicorp. The Prince, who quietly bought about 4.9 percent of Citicorp's common stock in the last months of 1990, could eventually own as much as 14.9 percent of the company with his new stake. But he will not be represented on Citicorp's board and has promised not to try to gain control over the company.

 

Citicorp, urged by the Federal Reserve to improve its financial condition, has been trying since October to raise $1 billion to $1.5 billion in capital from investors around the world through the sale of a new preferred stock issue. The deal with the Prince was for a portion of this stock.

 

The Result?

 

http://www.independent.co.uk/news/people/profiles/prince-alwaleed-bin-talal-success-is-the-ultimate-kick-500800.html

 

His big leap forward came in 1991 when, at the bottom of the recession, he invested $590m in Citicorp, which merged with Travelers Group seven years later to create Citigroup, the world's biggest bank. Alwaleed's investment in the company soared almost 20 times in value and his 4 per cent stake is now worth $10bn. What he describes as the best financial decision of his life turned him into a business celebrity.

 

And now another crisis is giving him and others an opportunity to DO IT AGAIN.

[Guest]

Wasn't he at a loss with the C investment back in Feb/March 2009?

[libor.plus1]

I recall an interview with him when the first cracks started appearing the first time around. He said something along the lines of:

 

"Ive talked to the CEO. He has assured me that there is nothing that I need to worry about, and that the bank has more than enough capital to face any problems". A few weeks later, C was nearly a penny stock.

[Liberty]

I haven't followed this at all, but do we know this isn't survivorship bias? Do we know the returns of that guy's who portfolio? Maybe he invested big chunks of cash in all kinds of stuff and we later just heard about the biggest success.

 

I'm not saying it's the case, I don't know. Just throwing that out there.

[seshnath]

I recall an interview with him when the first cracks started appearing the first time around. He said something along the lines of:

 

"Ive talked to the CEO. He has assured me that there is nothing that I need to worry about, and that the bank has more than enough capital to face any problems". A few weeks later, C was nearly a penny stock.

 

I am not a fan of the Prince.  I thought I would add a little local flair to the discussion.

 

I recall reading about a conversation he had with Buffett that went something like this:-

The Prince says to Buffett "People here call me Warren Buffett of the Middle East.  I consider it an honor."

Buffett's reply "I consider it an honor when people call me Al-Waleed of Omaha."

I thought Buffett's reply was really funny.

 

Here are some links:-

 

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a3pNjAm3wGxM

http://www.thenational.ae/business/buffett-of-arabia-changes-channels?pageCount=2

http://findarticles.com/p/news-articles/international-wire/mi_8131/is_20110722/interview-prince-alwaleed-bin-talal/ai_n57884781/

http://www.arabianbusiness.com/power500/entry/385482

[Guest]

I recall an interview with him when the first cracks started appearing the first time around. He said something along the lines of:

 

"Ive talked to the CEO. He has assured me that there is nothing that I need to worry about, and that the bank has more than enough capital to face any problems". A few weeks later, C was nearly a penny stock.

 

I am not a fan of the Prince.  I thought I would add a little local flair to the discussion.

 

I recall reading about a conversation he had with Buffett that went something like this:-

The Prince says to Buffett "People here call me Warren Buffett of the Middle East.  I consider it an honor."

Buffett's reply "I consider it an honor when people call me Al-Waleed of Omaha."

I thought Buffett's reply was really funny.

 

Here are some links:-

 

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a3pNjAm3wGxM

http://www.thenational.ae/business/buffett-of-arabia-changes-channels?pageCount=2

http://findarticles.com/p/news-articles/international-wire/mi_8131/is_20110722/interview-prince-alwaleed-bin-talal/ai_n57884781/

http://www.arabianbusiness.com/power500/entry/385482

 

According to the first link, "Alwaleed’s arrival as a celebrity investor came with the Citicorp stake, for which he paid the equivalent of $2.98 a share after adjusting for stock splits, acquisitions and spinoffs, according to Bloomberg calculations."

 

It's now around $2.67 adjust for the reverse split.

[Icarus]

There's a book about him that includes a chapter on his bank investment.

http://www.amazon.com/Alwaleed-Businessman-Billionaire-Riz-Khan/dp/0060850302/ref=sr_1_1?ie=UTF8&qid=1315758478&sr=8-1