Page 18 - Aamir Rehman Gulf Capital and Islamic Finance The Rise of the New Global Players

Introduction 3

investor). ADIA, typically discreet in its investment activities, is
widely viewed as one of the world’s largest institutional investors.
Prince Alwaleed, individually or through his firm Kingdom Holding
Company, is also a major shareholder in Apple, the Four Seasons
Hotels, and a host of other multinational firms whose total customer
base worldwide is in the hundreds of millions.
When Ford sold off its business line Aston Martin—world-
famous as James Bond’s preferred vehicle—the principal buyers were
two investment companies not from Detroit or Tokyo, but from
Kuwait. Further, the transaction was an Islamic one, structured to
conform to the guidelines of Shariah to meet the preferences of Aston
Martin’s new owners. The Aston Martin transaction was by no means
the first Islamic acquisition of a prominent US firm; for example,
Caribou Coffee (America’s second-largest coffeehouse chain) is
owned by a Bahrain-based Islamic investment firm.
Such high-profile investments by Gulf-based and Islamic institu-
tions are not surprising when one considers the following facts:

■ Collectively, the Gulf states control over 40 percent of the
world’s known oil reserves and nearly a quarter of global
natural gas reserves. 2
■ By the end of 2006, the GCC states’ foreign assets reached an
3
estimated $1.9 trillion. No doubt, these grew substantially in
2007 and early 2008 before suffering losses in the subsequent
financial crisis.
■ Gulf-based investors either currently hold or historically have
held major stakes in prominent global companies. Both
Gucci and Tiffany & Co., for example, have been owned by
Bahrain-based Investcorp in the past. 4
■ In 2006 alone, the net capital outflows from the Gulf were
above $200 billion—a figure surpassed only by China. 5
■ In the same year, GDP per capita in the GCC reached
$19,000—nearly three times that of China and more than five
times that of India. 6
■ In the auto industry alone, Gulf investors hold major stakes in
Daimler, Ferrari, and (as mentioned previously) Aston Martin. 7
■ The GDP per capita of Qatar is astonishing—it was nearly
$86,000 in 2008. That’s 1.8 times the US figure of about
$47,000, 2.6 times the figure for the EU, a whopping 14 times