The spy chief behind a $240bn corporate empire 

Two scoops to start: First, CVC-owned US public relations firm Teneo is set to deepen its footprint in the UK financial communications market on Tuesday with the purchase of smaller rival Tulchan.

And second, US activist investor Jeff Ubben has taken a $500mn stake in Bayer, the German conglomerate still reeling from litigation over its weedkiller Roundup and years of shareholder discontent.

In today’s newsletter:

• Sheikh Tahnoon bin Zayed al-Nahyan’s empire of influence

• The Murdoch trust in the spotlight

• Wall Street investors look to Iowa

Abu Dhabi’s royal renaissance man 

DD readers are undoubtedly familiar with Saudi Arabia’s crown prince Mohammed bin Salman, who chairs the kingdom’s massive sovereign wealth fund, and Sheikh Mohammed bin Zayed al-Nahyan, Abu Dhabi’s ruler, also known as MBZ.

But there’s another royal tycoon that tends to slip under the radar: MBZ’s brother Sheikh Tahnoon bin Zayed al-Nahyan, the United Arab Emirate’s national security adviser who also controls some of the country’s most powerful institutions.

The spy chief-slash business mogul’s rise over the past decade has epitomised the nexus between power, business and politics in the Gulf states such as the UAE, where Abu Dhabi’s absolute monarchy controls crucial economic sectors.

Tasked by his brother with handling some of the state’s most sensitive issues such as the UAE’s Iran and Yemen files and intelligence co-operation with the US, Russia and the UK, the 53-year-old martial arts expert also finds the stamina to chair First Abu Dhabi Bank.

FAB, the nation’s largest lender in which the government and ruling family hold significant stakes, became the latest in a string of suitors to back away from a potential takeover of Standard Chartered last week as it looks to expand beyond the UAE, especially in investment banking.

Sheikh Tahnoon is also the mastermind behind International Holding Company, a secretive company that has swelled to a $240bn valuation since he took over in 2020.

Our colleagues Andrew England and Simeon Kerr took a closer look at IHC, an obscure operator of fish farms and food and real estate businesses that has grown dramatically since Sheikh Tahnoon became chair.

The transformation has gone largely unnoticed outside of the UAE and is little understood — even by local bankers.

“Nobody knows,” said one Gulf-based international banker when asked to explain its exponential growth, which has risen to become the second-largest company in the Middle East after Saudi Aramco. Its share price has soared 42,000 per cent since 2019.

It has even come as a surprise to IHC’s chief executive Syed Basar Shueb, who called it “amazing” in an interview with the FT. He attributed much of the growth to the transfer of more than 40 companies worth a collective $4.7bn to IHC from Royal Group, an Abu Dhabi conglomerate also chaired by Sheikh Tahnoon that owns 62 per cent of IHC.

IHC also has a $10bn war chest for investments and is continuing to use acquisitions to fuel its growth, Shueb added.

Sheikh Tahnoon’s vision for IHC “was limited to creating value for the shareholders”, said Shueb. “We do the acquisition, we do the synergy, immediately next we go for diversification.”

But questions still linger over the company’s rapid growth. Ernst & Young said its review of IHC’s latest financial statement, for the third quarter of last year, was “substantially less in scope” than an audit along international standards and therefore EY was unable to obtain assurance “of all significant matters”.

IHC countered with: “Due to the limited amount of information that is required to be presented in an interim financial statement . . . external auditors typically do not conduct a full-fledged audit of these financial statements.”

One thing’s for certain: IHC’s rise has solidified Sheikh Tahnoon as one of the most powerful businessmen in the Middle East.

“He oversees everything. He’s the trusted under-the-radar guy,” Kirsten Fontenrose, former senior director for Gulf affairs at the National Security Council in the administration of Donald Trump, told the FT in 2021.

More recently, Sheikh Tahnoon has been dabbling in the hedge fund world. ADQ, a state holding company chaired by (you guessed it!) Sheikh Tahnoon and Royal Group have joined the MBZ-chaired Mubadala state fund in backing a $6bn fund launched by SoftBank trader Rajeev Misra.

Inside the Murdoch trust

There’s always something headline-worthy happening in Rupert Murdoch’s media empire, and the past few weeks have held no shortage of intrigue.

At the end of last month, Axios reported that the billionaire businessman and media baron Michael Bloomberg was interested in buying either Murdoch’s Dow Jones (the owner of The Wall Street Journal) or the Washington Post. Bloomberg has since denied the report.

Now, DD has heard that the “special committees” of independent board members tasked with exploring a proposed plan to reunite the two halves of Murdoch’s media empire — Fox and Dow Jones’s parent company News Corp — could be providing some guidance this week on whether the deal is happening or not.

A Fox-News Corp merger could spark a battle for control among Murdoch’s children, the FT’s Alex Barker reports in this Big Read, as dilemmas of succession and tangled family loyalties become front and centre.

How the power is divided between the Murdoch dynasty’s next generation hinges greatly on the family trust.

A family entity — today called Cruden Financial Services — manages crucial trust decisions and the voting rights of the shares. Murdoch remains in effective control. But things grew more complicated in 1999, when Rupert’s divorce settlement from his second wife Anna Murdoch Mann established unbreakable terms to hand down his fortune.

Anna demanded that Murdoch’s assets were put in trust both for her children — Lachlan, Liz and James — and Prue, Murdoch’s child from his first marriage. Murdoch representatives hold four of the eight votes on Cruden until he dies, while the children’s nominees have one each.

Cruden decides by majority how to vote Fox and News Corp stock, according to people familiar with the working rules. In short, all of the four siblings wield a veto over fundamental changes. (Grace and Chloe, Rupert’s youngest daughters with his third wife Wendi Deng, won’t have a formal say over how the family trust is governed for at least 10 years.)

But there’s little guarantee that his children will put on a united front. Tensions have simmered as Lachlan oversees a Fox News operation that James seems to consider a threat to democracy. Liz and Prue’s alliances are still unclear.

“There is going to be a lot of jockeying for position and a lot of ugliness, and Lachlan will not get away with maintaining the status quo,” said one veteran adviser to Murdoch.

That status quo has already been challenged with the aforementioned committees formed to reunite Fox and News Corp, which were split following a costly phone hacking scandal in 2012.

A cold war has been brewing for years over the future of Murdoch’s media empire. The tensions may soon spill out into the open.

Private capital chases the American dream

“Is this heaven?”, asks a character in the classic 1989 movie, Field of Dreams.

“It’s Iowa,” responds Kevin Costner’s character to his father’s ghost.

In 2023, Iowa is a field of dreams, not for baseball, but for Wall Street’s biggest players looking to grow their assets under management. Last month, a life insurer backed by Elliott Management made a $4bn bid for Iowa’s American Equity Investment Life.

AEL, as it’s known, is one of the biggest peddlers of retirement annuities. The otherwise sleepy product has become one of the hottest asset classes on Wall Street as customer premiums are typically invested in bonds and loans.

As DD’s Sujeet Indap and Mark Vandevelde have chronicled for years, firms like Apollo, Blackstone, Carlyle and several others have built big life insurance and annuities businesses to support the hundreds of billions they manage in credit assets.

AEL has been unique in that its chief executive, Anant Bhalla, has built a private equity model within a publicly traded life insurance company. Just before the Elliott bid, AEL publicly feuded with its largest shareholder, Brookfield Asset Management.

Now with the company seemingly in play, high finance’s biggest and baddest funds may soon be hoping to find their own salvation in America’s heartland.

Job moves 

• Morgan Stanley chief operating officer Jonathan Pruzan, a leading contender to become the bank’s next chief executive, has decided to leave at the end of this month.

• Chinese billionaire Jack Ma is to relinquish control of Ant Group as he continues to withdraw from his online businesses following Beijing’s tech crackdown.

• Tim Wu, the White House adviser on competition policy and a key player in the push by Joe Biden’s administration to increase antitrust, stepped down from his role last week. He will be returning to his professorship at Columbia Law School.

• Private equity firm Clayton, Dubilier & Rice has appointed Dan Glaser, former president and CEO of Marsh McLennan, as an operating partner.

Smart reads

Short on fuel While Elon Musk’s wild ride at Twitter dominates the headlines, his electric vehicle group Tesla is beginning to veer off course because of slipping demand and an onslaught of competition, the FT reports.

The last supper Noma, the Copenhagen restaurant widely considered to be the pinnacle of fine dining, is closing its doors as its labour-intensive and costly model faces a sustainability crisis. The closure reflects an industry-wide dilemma, the New York Times reports.

The price of youth Tech billionaires are investing heavily in anti-ageing research but experts warn of an ethical minefield ahead, the FT reports.

News round-up

AstraZeneca to buy US biotech CinCor in $1.8bn deal (FT)

EY earmarks $2.5bn for consulting arm M&A splurge after planned split (FT)

Rishi Sunak revives talks with SoftBank on London listing for Arm (FT)

Goldman Sachs prepares to cut 3,200 jobs to rein in costs (FT)

SEC charges former McDonald’s chief with misleading investors (FT)

Boss of South African power producer Eskom survived poisoning attempt in December (FT)

Hedge fund firm Rokos posts loss after bond market turmoil (FT)

Man United, Liverpool or Spurs may be buyout targets for Qatar Fund (Bloomberg)