Morgan Stanley Announces Joint Venture in Saudi Arabia

Partnership with The Capital Group Further Expands Morgan Stanley’s Presence in the Middle East

London —

Morgan Stanley today announced its intention to enter into a joint venture agreement with The Capital Group (“TCG”), a leading local investment bank in Saudi Arabia.  TCG has its head office in Riyadh with branch offices in Jeddah and Khobar.  The joint venture will operate under the name of Morgan Stanley Saudi Arabia. 

“This joint venture is an important milestone in our growth strategy,” said John J. Mack, Chairman and CEO of Morgan Stanley.  “Morgan Stanley has a strong track record of making long-term commitments to new markets and establishing a presence in Saudi Arabia through this joint venture is the most recent example.  We are looking forward not only to contributing to the growth of the Saudi market, but also to helping develop the substantial Saudi talent base in the Kingdom.”

“We are delighted to be partnering with The Capital Group,” commented Dr Georges Makhoul, Morgan Stanley’s President for the Middle East and North Africa region.  “Having a presence in the Kingdom of Saudi Arabia is a critical part of our strategy to grow our MENA business.  With the largest stock market capitalization in the MENA region, and a growing GDP, the Kingdom of Saudi Arabia is a key market both for us and our clients around the world. Through the JV with TCG, we gain an experienced and respected management team, a strong local franchise and an ambitious growth plan to build a market leading investment banking and asset management business.”

The Capital Group was founded by Dr. Fahad Almubarak in 2001, and holds licenses from the Capital Markets Authority in Saudi Arabia to offer investment advisory, investment banking, asset management, and trading services.  Since its foundation, TCG has established a leading position in its key market, with a significant pipeline of current mandates. 

“We are excited to be partnering with Morgan Stanley,” said Dr Almubarak, Chairman & Managing Director of TCG. “As clients in the Kingdom increasingly demand sophisticated solutions to their investment needs, we believe that there is a significant opportunity to build a leading investment banking franchise in the Kingdom of Saudi Arabia.  The combination of Morgan Stanley’s global expertise and reach, together with their range of market-leading products, will enable us to capitalize on this opportunity.”

“The joint venture, which will focus exclusively on the Kingdom of Saudi Arabia, will offer clients a broad range of services, including investment banking, capital markets, sales and trading, asset management, and private wealth management,” said Basel Algadhib, Chief Executive Officer of TCG.  Dr Almubarak and Basel Algadhib will remain as Chairman and Managing Director, and Chief Executive Officer respectively, of the joint venture, which will initially employ 25 professionals.

The transaction is subject to final documentation and regulatory approvals.  Terms of the transaction, which is scheduled to close by the end of the first quarter 2007, were not disclosed.

Morgan Stanley is a leading global financial services firm providing a wide range of investment banking, securities, investment management, wealth management and credit services.  The firm's employees serve clients worldwide including corporations, governments, institutions and individuals from more than 600 offices in 30 countries.  For further information about Morgan Stanley, please visit www.morganstanley.com.

Note to Editors:

Morgan Stanley in the Middle East

Morgan Stanley has been active in the Middle East region since the 1970s, providing a variety of investment banking, asset management and wealth management services.  The Firm opened its first office in the region in the Dubai International Financial Centre in March 2006, and also plans to open other offices in the region.

Recent transactions in the region include:

  • Acted as Global Coordinator and Sole Structuring Advisor for the issuance of $1.55bn Notes for the Egyptian General Petroleum Corporation (EGPC)
  • Acted as Joint Bookrunner for €4.8bn accelerated bookbuild offerings for KPC's Sanofi-Aventis shares in two separate transactions
  • Created a consortium for Saudi Oger in its $6.55bn acquisition of the 55% stake in Turk Telecom
  • Acted as Joint Bookrunner for Mashreqbank's two Floating Rate Notes offerings totalling $625MM
  • Lead managed $500MM Floating Rate Note offering for Emirates Bank
  • Acted as Joint Global Coordinator for the IPO of Kingdom Hotel Investments (KHI)

The Capital Group

  • TCG was founded by Dr. Fahad Almubarak in 2001
  • In 2006, Dr. Almubarak was joined by Basel Algadhib as partner and Chief Executive Officer of the company
  • The firm is engaged in offering investment banking and investment advisory services to select clients based mainly in the KSA
  • In 2005, TCG applied and received license from the Capital Markets Authority (CMA) to offer Advisory (investment advisory) and Arranging (investment banking) services
  • In 2006, TCG received licenses from the CMA to offer asset management, trading, and custody services
  • Head office located in Riyadh, with branch offices in Jeddah and Khobar

Dr Fahad Almubarak

  • Dr. Fahad Almubarak is currently Chairman and Managing Director of The Capital Group, which he founded in 2001. He has over 17 years of work experience in various financial and investment positions
  • Currently serves on the board of directors of several public companies: National Industrialization Company, Saudi Hollandi Bank, Mobily (2nd GSM Operator), and the board of other private companies. He also serves on boards and committees of several non-profit organizations
  • From 1991 to 1999, Fahad was the General Manager of Rana Investment Company
  • Served as a member of the Shoura Council where he was Vice Chairman of Economic and Energy Committee, and served as a member of the Saudi Negotiating Team with the international oil companies towards the partial privatization of the natural gas industry in Saudi Arabia
  • Fahad holds a Ph. D. in Business Administration from the University of Houston, Texas. He also an MBA, and M.S. in Accounting & Taxation. Before that he received M.S. in Industrial Management and B. S. in Civil Engineering from SMU, Dallas, Texas

Basel Algadhib

  • Basel Algadhib joined The Capital Group in March 2006 as a Partner & Chief Executive Officer
  • For the last 26 years, he held senior positions with several global and regional financial institutions and corporations covering the Gulf region, including Saudi Aramco, Gulf Investment Corporation, United Saudi Commercial Bank, Riyad Bank, and, most recently, as Head of Middle East Investment Banking for JPMorgan
  • His experience covers a wide spectrum of investment and wholesale banking including: investment banking, capital markets, asset management, treasury & proprietary investment, and private equity
  • Basel has a M.S. in Construction Management from Stanford University, and a B.Sc. in Civil Engineering from KFUPM in Dhahran, Saudi Arabia. He is also a Chartered Financial Analyst (CFA) since 1993

Contact: Media Relations, Hugh Fraser, +44.207.425.3923