‘Our phones are ringing off the hook’: Amid a global downturn, the finance world is chasing Middle Eastern money
A man dressed in a thawb walks past Dassault Falcon executive jets, Dubai, United Arab Emirates
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The organizers of the Investopia x Salt conference in Abu Dhabi — the brainchild of American financier and one-time White House press secretary Anthony Scaramucci and Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum — expected to see 1,000 guests over its two-day event in early March. Instead, it got 2,500.
“We’re a little overwhelmed, but it’s a great sign,” one of the organizers told CNBC. Some others were annoyed. “It’s too many people. Everyone is coming to the Gulf now begging for money. It’s embarrassing,” one Dubai-based fund manager said. Both sources declined to be named due to professional restrictions.
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That oil-rich Gulf states have a lot of money to spend isn’t new. The region’s 10 largest sovereign wealth funds combined manage nearly $4 trillion, according to the Sovereign Wealth Fund Institute. That’s more than the gross domestic product of France or the U.K. — and it doesn’t include private money.
But the influx of foreign institutional investors — and visible interest from venture capitalists and startup founders in advanced sectors like fintech, digital transformation and renewable energy technology — shows a level of sophistication that’s being noticed now more than ever, industry players say.
“Investment used to only flow from the Gulf outward. Now it’s going both ways; institutional investors are coming and investing here,” Marc Nassim, managing director at Dubai-based investment bank Awad Capital, told CNBC.
The regional investors, especially the sovereign funds but also the families, are now much more sophisticated than before.
Marc Nassim
Managing director, Awad Capital
“The Middle East feels more stable than Europe does right now,” Stephen Heller, founding partner at Germany-based AlphaQ Venture Capital, told CNBC. “Europe’s security issues, economic inequality are getting worse … meanwhile, the Gulf has its s— together.” Heller’s fund of funds, which invests in megatrends like climate technology, infrastructure, health and fintech, recently opened its first Middle Eastern office in Abu Dhabi.
“There’s an entrepreneurial energy in the UAE and Saudi Arabia today,” Heller said. “I see the potential because you have technically infinite capital, and if you have entrepreneurs coming here, you can have huge outcomes.”
Follow the capital
As oil prices made a roaring comeback in the last two years, the Gulf’s public wealth funds went on a spending spree. The top five regional funds in terms of spending in the last year — Abu Dhabi’s ADIA, ADQ and Mubadala, Saudi Arabia’s PIF and Qatar’s QIA — deployed a combined total of more than $73 billion in 2022 alone, according to sovereign wealth fund tracker Global SWF.
Abu Dhabi city skyline, United Arab Emirates.
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Meanwhile, the value of sovereign wealth funds’ assets globally dropped from $11.5 trillion to $10.6 trillion between 2021 and 2022, Global SWF reported, and those held by public pension funds also dropped amid a dramatic downturn in stock and bond markets.
“Five out of the ten most active investors hail from the Middle East,” and ADIA is currently the “world’s largest allocator to hedge funds,” Global SWF’s 2023 report wrote. It added that GCC sovereign wealth funds “played an important role in 2020 during the Covid-19 pandemic and now again in 2022 during times of financial distress.”
So it’s an understatement to say that foreign demand is high. “A lot of places in the world are low on capital – Western institutional funds are kind of hamstrung. And this region has a lot of capital. Our phones are ringing off the hook,” one manager from a UAE investment fund said, declining to be named due to professional restrictions.
No longer ‘dumb money’
But while many overseas companies have long seen the Gulf as a source of “dumb money,” some local investment managers said – referring to the stereotype of oil-rich sheikhdoms throwing cash at whoever wants it – investment from the region has become much more sophisticated, employing deeper due diligence and being more selective than in past years.
“The regional investors, especially the sovereign funds but also the families, are now much more sophisticated than before,” Awad Capital’s Nassim said. “They are much more diligent than before in terms of who they write the check to.”
“Before it was much easier to come and say, ‘I’m a fund manager from San Francisco, please give me a couple million’. Now, not only are they more sophisticated but there are far more funds from all over the world – the U.S., Latin America, from Europe, Southeast Asia – coming here to raise capital. I think that a very small minority of them will be able to take money from the region – they are much more selective than before.”
A screen broadcasts Khaldoon Al Mubarak, chief executive officer of Mubadala Investment Co., during a session at the Future Investment Initiative (FII) conference in Riyadh, Saudi Arabia, on Tuesday, Oct. 25, 2022.
Tasneem Alsultan | Bloomberg | Getty Images
In the UAE in particular, liberalizing reforms, a much-praised handling of the Covid-19 pandemic and a willingness to do business with anyone — including countries like Israel and Russia – have enhanced its image to foreign investors. In Saudi Arabia, financiers are attracted to historic reforms and a massive growth market of nearly 40 million people, some 70% of whom are below the age of 34.
The money from the GCC funds still overwhelmingly goes to developed markets, in particular the U.S. and Europe. Priority sectors include energy, renewables, climate technology, biotech, agri-tech and digital transformation, fund managers say.
Like any commodity-related economic boom, however, fortunes are subject to change – it was not so long ago that the pandemic pushed oil prices to multi-decade lows, forcing Gulf governments to reign in spending and introduce new taxes. Saudi Arabia and the UAE in particular are investing heavily in diversification, with a view to the long term.
“The music would stop if [the price of] oil goes down in a way that some SWFs are forced to use their reserves to help governments shore up their fiscal positions – very unlikely – or geopolitical risk” such as war or uprisings, Nassim said.
“If oil goes down, the surplus generated and which is usually allocated to the SWFs would obviously reduce, and that would force them to reduce their investments and limit them to assets that generate higher returns,” he added, though noted that not all SWFs have the same mandate when it comes to investment strategy.
For those companies seeking investment from the deep pockets of the Middle East, they are wise to do so while the music is playing.
Aviation startup ZeroAvia says it’s been granted a “raft” of 45 new patents key to the development of practical large hydrogen aviation engines – and the company says it has 200 more H-related patents in the pipeline!
The news comes just weeks after ZeroAvia and Scottish regional airline Loganair announced a new, hydrogen-electric “turboprop” replacement motor capable of up to 5MW of shaft horsepower (~6,700 hp). United States Patent and Trademark Office (USPTO) no. 12,341,225 covers an integrated hydrogen-electric engine design land is key to the development of a modular multi-MW hydrogen-electric engine for the ATR 42 and 72 model aircraft — which Loganair owns more than twenty of.
ATR isn’t the only potential customer ZerAvia is eyeballing, either. Despite hydrogen losing ground on utility-scale projects and more companies realizing that it’s “impossible” for hydrogen to compete as a transportation fuel, the fuel still seems to have some practical application in the aviation space. Both Airbus and Boeing have advanced plans and IP for hydrogen-ready airframes in recent weeks, as well, making the IP for large hydrogen-powered aviation engines that much more valuable.
“Recent patents filed and granted around hydrogen aviation give a window into an accelerating field of innovation,” explains Val Miftakhov, Founder and CEO, ZeroAvia. “As we see the large airframe manufacturers beginning to compete on technologies for hydrogen aircraft, there is a big opportunity for companies pioneering hydrogen propulsion systems. These are the inventions that will deliver truly clean, more affordable and highly efficient commercial air travel.”
What it’s all about
Like many tech-based startups, securing IP has been an integral part of ZeroAvia’s strategy, with the value of its patents being, essentially, the value of the company. Just as – if not more important to airlines like Loganair, American, and EcoJet, however, are the potential cost-savings of hydrogen compared to conventional aviation fuels like kerosene.
Importantly, these novel engines promise cost reductions for airlines. The substantially lower maintenance needs of hydrogen-electric engines will mean a decrease in maintenance and downtime for an airline’s fleet, with hydrogen fuel also projected to be significantly more cost effective than kerosene over time.
ZEROAVIA
You can read more about the new ZA600 and ZA2000 hydrogen-electric av motors here, and let us know what you think of hydrogen’s chances against traditional, kerosense-based aviation fuels in the comments.
SOURCE | IMAGES: ZeroAvia.
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You might want to hold onto your handlebars for this one – literally. The fashion-forward British electric scooter maker Bo just unveiled what could be the most extreme electric scooter the world has ever seen. Named The Turbo, this standing e-scooter isn’t just playing around with speed – it’s aiming to smash right through it and find out what’s waiting on the other side.
And it all begs the question, “How much is too much?”
When we talk about fast electric scooters, we’re usually in the neighborhood of 50 mph (80 km/h). But the Bo Turbo doubles those numbers.
With 100 mph+ (160+ km/h) top speeds and claimed acceleration that’s faster than a Tesla, this scooter seems to use a design philosophy pulled straight from the playbook of Formula One. Thus, it should come as no surprise that the team behind The Turbo includes engineers with experience from Williams F1 and the Bloodhound Land Speed Record rocket car.
The world’s fastest e-scooter?
Built on the same base chassis as the company’s sleek road-going Bo Model-M, The Turbo takes everything up a notch – actually, several notches. It features a 24,000 W dual-motor powertrain, 1,800 Wh battery, advanced traction control, and a power-to-weight ratio that reportedly beats a Bugatti Veyron.
At full power, the system is capable of propelling riders down a straightaway at three-digit speeds while standing upright. It’s absurd. It’s glorious. It’s gratuitous. It’s a dream. Or it’s a nightmare.
Bo says the machine is already delivering 85+ mph (137+ km/h) in early track testing at Goodwood Motor Circuit and is currently in development to push beyond the 100 mph barrier under Guinness World Record supervision.
And just in case you’re wondering if this is some experimental prototype cooked up in a lab – it’s not. The company is planning a limited run of built-to-order Turbo scooters, starting at a whopping $29,500. The first one is scheduled for delivery to a collector in Madrid during the 2026 Formula One race weekend.
From F1 brake ducts to street scooter DNA
Despite the headline-grabbing speed numbers, there’s a ton of serious engineering going on here. The Turbo uses ram-air intakes based on F1 brake cooling designs to keep the motors and controllers from overheating. The chassis – made from aerospace-grade aluminum and CNC-machined billet parts – is based on Bo’s proven Monocurve platform, the same structure that underpins the Bo Model-M. In fact, that might be the most impressive part of all, that the same chassis used underneath their everyday-ride-it-to-work Bo Model-M scooter is also holding together this 100 mph beast.
Bo’s team insists that despite the monster specs, The Turbo remains “surprisingly rideable.” Professional BMX rider Tre Whyte has piloted over 20 high-speed test runs, with the team now preparing to push the envelope even further.
A wild PR stunt – or something more?
It’s tempting to see The Turbo as just a headline machine (and hey, it works), but Bo says this project is about more than just chasing speed records. According to Bo CEO Oscar Morgan, “The Turbo is part of our mission to elevate these futuristic electric vehicles into the top tier of automotive performance.”
And honestly, they’ve got a point. E-scooters have exploded in popularity as low-speed urban vehicles, but the category rarely gets taken seriously in the performance world, despite the advent of racing leagues. Bo wants to change that – and they’re using motorsport technology to do it.
Electrek’s Take
Is this a practical daily rider? Absolutely not. But that’s not the point.
Bo is doing what so few e-scooter companies are willing to do – pushing boundaries, proving performance, and trying to make scooters feel exciting, not just functional. Whether The Turbo hits 100 mph or not, it’s already helped raise the bar for what electric micromobility can be. And if that means they develop safer and stable ways to build scooters along the way, then all the better.
The fact that they actually plan to sell these is a bit worrying, though the $30k pricetag means the local teens on your street aren’t going to be terrorizing the sidewalks with them. Well, not unless you’ve got an oil sheikh and his teenagers living on your street.
But hey, if you’ve got thirty grand and a need for painful death levels of speed – maybe this is your next toy.
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Environment
Chevron defeats Exxon in dispute over Guyana oil assets, clearing path for Hess acquisition
Chevron has prevailed against Exxon Mobil in a dispute over Hess Corporation’s offshore oil assets in the South American nation of Guyana, Exxon CEO Darren Woods told CNBC’s Becky Quick on Friday.
The ruling by the International Chamber of Commerce in favor of Chevron clears the way for the oil major to complete its $53 billion acquisition of Hess Corporation.
Chevron shares jumped about 3% in premarket trading.
“We disagree with the ICC panel’s interpretation but respect the arbitration and dispute resolution process,” Exxon said in a statement Friday.
The dispute had created significant uncertainty over whether Chevron’s acquisition of Hess would close, weighing on the oil major’s stock performance. The transaction would have failed if Exxon had prevailed.
Exxon and China National Offshore Oil Corporation had filed an arbitration case with the ICC, claiming a right of first refusal over Hess’s assets in the Stabroek Block, an oil development off the coast of Guyana.
Hess has a 30% stake in an oil patch, while Exxon leads the project with a 45% stake and CNOOC maintains 25% stake.
“We welcome Chevron to the venture and look forward to continued industry-leading performance and value creation in Guyana for all parties involved,” Exxon said.
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