Powerhouse Bankers' Secretive Trip to Saudi Arabia Amidst Escalating Israel-Hamas Conflict Grabs Global Attention

JPMorgan CEO Jamie Dimon and Citigroup's Jane Fraser are among the many bankers attending Saudi Arabia's annual investment conference on Tuesday. Known as "Davos in the Desert," the Future Investment Initiative (FII) will host over 6,000 participants from over 90 countries in the next three days. Despite concerns raised by US Secretary of Defense Lloyd Austin regarding potential escalation in the Middle East and potential attacks on American interests, the event remains popular and eagerly awaited.

Since the Hamas attack on October 7th, Israel has expanded its military campaign against the Palestinian militant organization and other adversaries in the region. The Israeli Defense Forces have escalated their airstrikes on the blockaded Gaza Strip, targeting Hezbollah operatives in Lebanon and key locations in the occupied West Bank.

A McDonald's logo is seen on a cropped version of an advertisement from 2020.

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Despite the increasing tension, numerous top executives will proceed with their scheduled trips to Riyadh in the following days to engage with clients and participate in panel discussions at the FII.

Prominent individuals attending include Larry Fink of Blackrocks (BLK), David Solomon, the CEO of Goldman Sachs (GS), Noel Quinn, CEO of HSBC, Ray Dalio, the billionaire hedge fund founder, as well as Stephen Schwarzman and Harvey Schwartz, both private equity executives of Blackstone (BX) and Carlyle (CG) respectively.

The prestigious lineup of guests at the event highlights the continued investor interest in the Middle East, which experienced robust economic growth in 2022, surpassing global standards.

The Saudi Arabian sovereign wealth fund, known as the Public Investment Fund (PIF), has become a significant player in global investment. Its prominence has grown due to the cautious approach of institutions in Europe and the United States, caused by high interest rates and escalating geopolitical tensions. According to Karen E. Young, a senior research scholar at Columbia University's Center on Global Energy Policy, people are attending the conference because it is the prime destination for those seeking investment from the PIF. She stated, "For many individuals, this is the essential place to be if you want funding from the PIF."

Goldman Sachs reported that the fund has experienced a remarkable growth in its assets under management, reaching approximately $700 billion, a substantial increase from $250 billion in 2018. The fund's diverse portfolio consists of investments in prominent global companies such as Uber (UBER), the US electric car company Lucid (LCID), as well as India's Jio Platforms and Reliance Retail.

The PIF was also one of the firstand the biggestinvestors in Softbanks Vision Fund, which has backed dozens of startups since its inception in 2017, including WeWork and Slack.

Money in the Middle East

Since its launch in 2017, the Future Investment Initiative has successfully navigated numerous geopolitical challenges, benefitting from the increasing influence of its funds. In 2019, the event persevered through a highly publicized disagreement between Riyadh and Washington regarding oil production cuts led by Saudi Arabia and its OPEC+ counterpart Russia.

Similarly, in 2018, the conference faced a boycott from numerous respected business leaders due to concerns surrounding the Saudi government's involvement in the assassination of journalist Jamal Khashoggi at the Saudi consulate in Istanbul.

Saudi Arabias crown prince Mohammad bin Salman, denied any personal involvement in Khashoggis murder but later confirmed it was carried out by Saudi officials.

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Bin Salman, who heads the Public Investment Fund, has played a crucial role in promoting closer ties between Saudi Arabia and Israel. In a recent statement, he described a potential agreement as "the most significant historic deal since the Cold War."

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Bin Salman recently called for concerted efforts to prevent the escalation of violence that could destabilize the region. He emphasized the need to establish favorable conditions for stability and the pursuit of peace, ensuring that the Palestinian people attain their rightful rights. This information was reported by the state-owned Saudi news agency SPA.

Notably absent from the FII this week is Masayoshi Son, CEO of Softbank. A company representative cited a "family health matter" as the reason for his absence, but no additional details were provided.

Richard Attias, the CEO of the FII Institute, the events organizer, reported that only a small number of individuals had withdrawn their plans to attend the conference. "The Middle East is now a burgeoning economy and a promising hub, and this fact is widely recognized," he commented on the SPAs X account.

Young of Columbia University suggests that the reason people continue to attend the event may be due to a more practical factor - the price of tickets. With each ticket costing approximately $15,000 per person, not including the expenses for flights and accommodation, it is clear that firms have made significant investments to participate. According to Young, this is not a negligible fee. Michelle Toh in Hong Kong provided additional reporting for this article.