This year, the demand for the investment summit in Riyadh, dubbed "Davos in the Desert," is so great that tickets are selling for $15,000, the WSJ writes.
Last year's summit was attended by the heads of two of the world's largest investment companies – Blackstone CEO Stephen Schwarzman and Bridgewater Associates founder Ray Dalio.
A few years ago, after the murder of journalist Jamal Khashoggi, European and American companies avoided investing in Saudi Arabia for political reasons and boycotted the Riyadh Investment Summit. But in the last two years, amid a huge influx of cash into the Gulf countries, Saudi Arabia and other Middle Eastern countries have begun to play the role of a "global ATM," the publication writes.
Middle Eastern investment funds are closing one big deal after another. In May, the Emirati state-owned holding company Mubadala, which can be attributed to sovereign wealth funds, bought a controlling stake in Fortress Investment from SoftBank for $2 billion.
In August, AviLease, owned by Saudi Arabia's sovereign wealth fund, acquired Standard Chartered's aviation division.
Last year, the Middle East experienced an IPO boom: companies in the region managed to raise 179% more funds than a year earlier. Global investors invested $19.8 billion in the region last year.
Western companies, even such large ones as BlackRock, are opening offices in the Gulf countries to make it easier to attract investment. And in the waiting rooms of large Middle Eastern investment funds, you can almost always find several managers from Wall Street and Silicon Valley.
The Middle Eastern monarchies have found themselves flush with cash amid a sharp rise in energy prices (partly a side effect of the war in Ukraine). At the same time, Western financiers are forced to cancel deals and disinvest amid rising key interest rates.
Since the current prosperity of Middle Eastern countries is mainly due to high energy prices, a drop in oil prices is likely to lead to capital outflows, as it did during previous energy booms that turned into a collapse, the WSJ writes.
Background. As a reminder, Italy and Saudi Arabia signed an agreement to increase investment. The primary focus of this agreement is on the development of projects in the energy sector.