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IN 1991, SAUDI Arabia’s Prince Alwaleed bin Talal scooped up $590 million of convertible preferred stock in crisis-stricken Citicorp for a bargain. In doing so, he saved the bank from ruin and made himself billions – cementing his reputation as one of the world’s canniest investors. Nearly two decades later, Alwaleed, now Citigroup’s largest individual investor following Citicorp’s merger with Travelers Group Inc, once again rode to the bank’s rescue, this time at the height of the global financial crisis: in November 2008 the Saudi billionaire increased his stake in the beleaguered firm to 5%, vowing to stand behind the company whose stock he has said he will never sell.
But the investment represented an unprecedented risk for the veteran investor: as Citi’s value plummeted in 2008, Alwaleed’s Riyadh-based investment company Kingdom Holding – through which he has invested in the US bank as well as brands including News Corp, AOL Time Warner and Four Seasons Hotels – ended up posting a record $7.92 billion loss for the year.
Although Kingdom Holding’s fortunes are beginning to improve once more – its Q3 profit of $28 million, although down 57% from a year earlier, is still a far cry from the $8.3