Expats flee Saudi fund, bemoan crown prince control
Executives eschew handsome pay packages amid complaints about micromanagement
DUBAI— Saudi Arabia’s flagship government investment arm has suffered several prominent defections by Western executives, hampering its enlarged responsibilities to help transform the country’s economy.
The roughly $200 billion fund’s British head of legal, its Swiss chief of public investments and a Spanish privateequity associate all resigned this year after fewer than 18 months in their roles, said people familiar with the exits.
A former head of strategy lasted even less time. Executives for Saudi Arabia’s sovereign public investment fund, or PIF, poached Eric Ebermeyer from Dutch bank ABN Amro Group NV’s investment arm last year and walked him around the office on his first day as head of strategy to say hello to staff. But Mr. Ebermeyer ditched his high-paying role within weeks after deciding that he would have little say over strategy at a fund dominated by Crown Prince Mohammed bin Salman, people familiar with the matter said.
“It was not like investment banking at all,” added a person with knowledge of Mr. Ebermeyer’s decision.
Senior staffers who have jumped ship have complained about the crown prince ’s micromanagement, an unclear investment strategy and an erratic working environment at odds with the culture of banks and investment houses in London and New York. Some have abandoned pay packages of roughly $1 million per year with guaranteed bonuses, sometimes for the first and second year.
Recruiters say the international furor over the murder of Saudi journalist Jamal Khashoggi has made it more difficult to find top-flight replacements for those who are leaving and caused some to reconsider joining.
The result is that PIF is understaffed and often outgunned intellectually in major deals, people familiar with the fund say, as it emerged as a major global investor in the past two years. PIF is Silicon Valley’s biggest investor, owning major stakes in Uber Technologies Inc., Tesla and Magic Leap. It is the lead investor in SoftBank Group Corp.’s Vision Fund for technology investments.
The defections come during a furious pace of hiring at PIF, which has quadrupled its staff to over 400 since Prince Mohammed in 2016 tasked the fund with diversifying Saudi Arabia’s economy as part of a wider reform program. Most new hires are Saudis who have stuck with the fund, seen as a prestigious post inside the kingdom.
But it has been more difficult to retain the stable of Western bankers and financial whizzes needed to fulfil Prince Mohammed’s goals of building from scratch entire new industries in entertainment, tourism and technology.
A spokesman for PIF said it “has attracted and retained experienced individuals and future leaders from the kingdom and across the world.” The fund is building a team to drive economic diversification across Saudi Arabia and hopes to be the preferred employer for Saudi nationals and expatriates, the spokesman said.
To be sure, PIF and its new subsidiary projects have managed to attract respected Saudis and some experienced Western hands.
They include treasurer Alireza Zaimi, a former Bank of America Merrill Lynch banker, and the former chief investment officer at TIAA, Dennis Johnson, who replaced Mr. Ebermeyer.
PIF’s biggest hiring successes have been for its multibilliondollar projects that aim to jumpstart new industries where a blank canvas and strong financial backing entice top candidates. Bill Ernest, a 25-year veteran of Walt Disney Parks and Resorts, recently joined to lead development of cinemas and other entertainment experiences.
Keeping people is harder. Though Saudi Arabia is changing its culture via Vision 2030, the country remains conserva- tively religious, with few pastimes for Western expatriates and little access to alcohol. Candidates with little experience outside Western business and financial hubs sometimes struggle to adapt to Saudi Arabia’s working environment, recruiters say.
PIF’s expats in Riyadh have joked with friends that their lives resemble the 2016 film “A Hologram for the King.” The protagonist played by Tom Hanks repeatedly waits for an audience with the Saudi monarch to close a multimilliondollar sale of technology, only to miss out after finally pitching.
Swiss banker Cyrille Urfer was hired from Gonet & Cie to lead PIF’s investments into global public markets and hedge funds.
However, he made very few decisions and watched as PIF spent lavishly on high-profile private-equity and venturecapital deals such as a $45 billion commitment to SoftBank Group Corp.’s Vision Fund, said people who know Mr. Urfer.
The banker left in May telling colleagues he felt like the fund’s other priorities meant that he didn’t have much money to invest. He was joined by Tom Deegan, who ran the legal department, and Jacobo Solis, an associate in the direct investments team, who both left this year.
People close to PIF employees describe scenarios where employees wait for hours to get an audience with Prince Mohammed to pitch an idea that doesn’t lead anywhere. Ideas and deals are driven from the top down, they said.
Yasir Rumayyan, the fund’s Saudi managing director, spends a large part of his time with the crown prince, which means staff at PIF rarely see the boss, said one person familiar with the fund. PIF’s Chief Risk Officer Martin Botha, one of the first Westerners hired under the new mandate, told colleagues that he’d met Mr. Rumayyan only once in his first eight months at the fund, the person said.