Correction Appended: Sept. 17, 2008
If Wall Street is hoping that Prince Alwaleed bin Talal will ride to the rescue of America's crumbling banks, here's the word from the Saudi billionaire: Thanks, but no thanks. Having bailed out Citicorp on a couple of occasions most recently by helping in its recapitalization earlier this year Al-Waleed says he's not in the market for any more U.S. financial sector assets.
I spoke with Alwaleed in Riyadh on Tuesday, as the world reeled from the shock of the Lehman Bros. bankruptcy. In his offices on the 66th floor of the iconic Kingdom Tower, the prince (a nephew of King Abdullah) seems a world away from the tumult in New York City. But a giant TV screen in his office was tuned to CNBC, and he conceded that his personal worth may have taken a hit with the stocks slide, though he stressed that he was doing well with investments closer to home.
Excerpts from the interview:
TIME: Did you see this coming?
Alwaleed: I'm not sure anyone at all saw the depth and magnitude of the problems faced by some financial companies in the U.S. I will quote [Alan] Greenspan in saying that this is a once-in-a-lifetime, or once-in-a-century event. It shows the gravity of the problem over there.
TIME: You were involved with Citi's recapitalization earlier this year. Considering everything that's happened since then, any regrets?
Alwaleed: No. You have to understand that our involvement in the recapitalization of Citi is a long-term thing. It's not a one-, two-, three-year plan. In January 1991, I was the only investor in Citigroup at that time, with around $600 million. The next year, things didn't go well, but over the next decade, things really boomed dramatically. You have to look at the investment in Citi as a long-term thing.
But clearly, the financial sector in the U.S. is facing a huge crisis. When you have two big companies like Bear Stearns and Lehman vanish, and Merrill Lynch being absorbed, that tells you a lot about the difficulties being faced by the financial sector in the U.S.
TIME: Is this the bottom?
Alwaleed: I'm not sure it's the bottom yet. We're trying to get to the bottom. But every time someone says we're at the bottom, things get a bit worse.See photos of life and commerce in Saudi Arabia here.