Investors Fret Over Khashoggi Killing but Still Maintain Saudi Ties

Virgin founder Richard Branson announced he was pulling out of talks on a $1 billion deal with Saudi Arabia over the killing of a Washington Post columnist. State involvement in the killing, “if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government,” Mr. Branson said.

Days later in a text message, Mr. Branson counseled the Saudi crown prince, Mohammed bin Salman, to release female activists his country had imprisoned.

“If you were to pardon these women and a number of men too, it would show the world the Government is truly moving into the 21stCentury,” Mr. Branson texted the crown prince. “It won’t change what happened in Turkey but it would go a long way to start and change people’s view.”

Mr. Branson was one of the first in a parade of CEOs, fund managers and bankers who scrambled to figure out how to preserve their relationships with Prince Mohammed after the murder of the journalist Jamal Khashoggi in Saudi Arabia’s Istanbul embassy in the fall.

Mr. Branson urged Prince Mohammed to change his ways. Others adopted a dual strategy of public condemnation while trying to continue to do business as usual. Some shunned the formality of Saudi Arabia’s high-profile investment conference but pursued informal gatherings instead.

The reason: Many have tied their companies’ future to Saudi money and Crown Prince Mohammed’s wide-ranging economic overhauls.

This whole Khashoggi thing doesn’t mean anything,” said hedge-fund manager John Burbank, who has been one of the U.S.’s most prominent investors in Saudi stocks. “It means much less than the big, sweeping liberalization that’s happening in the kingdom.”

MBS, as Prince Mohammed is known, politely thanked Mr. Branson for his input. A few days later, the crown prince publicly denied involvement in the murder, calling it a heinous crime. The U.S. Central Intelligence Agency has since concluded that he likely ordered the killing.

American investors in Saudi stocks, besides Mr. Burbank, include Peter Thiel and hedge fund Bienville Capital Management, among others. Roughly 4% of the total Saudi market is held by foreigners.

One person’s life doesn’t matter unless it’s MBS’s,” Mr. Burbank says. “Khashoggi doesn’t matter.” He adds that investors who have steered away from Saudi Arabia are hypocrites, because some of them also invest in Russia and Turkey.

Mr. Burbank was among the dozens of Western executives and investors who showed up at the home of Yasir al Rumayyan—chairman of Saudi Arabia’s sovereign Public Investment Fund, which the crown prince oversees—on the eve of the investor conference in October. Over platters piled high with roast lamb, towers of sweets in golden birdcages and champagne flutes of fruit juice, they toasted their relationship beneath palm trees tinted by purple spotlights, attendees said.

SoftBank CEO Masayoshi Son backed out of the conference, but he still showed up at the lamb feast. Uber CEO Dara Khosrowshahi also pulled out of the conference, but Uber co-founder and board member Travis Kalanick was at the party, along with former congressman and current banker Eric Cantor and his boss, banker Ken Moelis, and venture capitalist Jim Breyer. Thiel Capital portfolio manager John MacMahon also appeared at the dinner, and the chief executive of Silicon Valley construction startup Katerra, Michael Marks, attended the investment conference.

Matt Barnard, the CEO of Plenty—an indoor-farming startup with $200 million in backing from a Saudi-backed SoftBank fund—flew to Saudi Arabia for the conference. But he returned home without attending, a Plenty spokeswoman says.

The cost of shunning Saudi Arabia could be high. Some business partners fear losing access to the kingdom in the future if they pull out of Saudi deals now.

Ari Emanuel, the CEO of Hollywood talent agency Endeavor, is negotiating to return a $400 million investment that the Saudi sovereign-wealth fund made in his company earlier this year, people familiar with the company’s plan say.

In the wake of Mr. Khashoggi’s disappearance, Mr. Emanuel said he was “really concerned about it.”

.. “Were there mistakes made? Absolutely there were mistakes made,” said Matt Michelsen, an associate of John Burbank and a Silicon Valley investor. “But this place is changing. I saw Starbucks opening on multiple corners. There are women walking around without abayas. It’s a fundamental shift that’s occurred.”

Why billionaires keep pouring money into the space industry

“It’s becoming more of a mainstream place for more financially focused” venture capitalists, said Carissa Christensen, Bryce’s founder and chief executive. “They are in it not because space is cool, but because they think this a place to generate serious return.”

.. For years, the industry was fueled by the vast fortunes of a few billionaires. Musk invested $100 million of his own money into SpaceX before capturing several billions of dollars in government contracts.

.. Last year, Jeffrey P. Bezos described the investment model for his space company, Blue Origin, this way: “I sell about $1 billion a year of Amazon stock, and I use it to invest in Blue Origin.”

.. Richard Branson has backed Virgin Galactic and a satellite company called OneWeb, while Paul Allen, the Microsoft co-founder, is building what would be the world’s largest airplane by wingspan to “air-launch” rockets.

.. More recently, Mark Cuban invested $500,000 into a company called Relativity Space, which plans to 3-D print an entire rocket. Astranis, which intends to use small satellites to beam Internet to places off Earth’s power grid, recently announced that it was being backed by Andreessen Horowitz, the Silicon Valley venture capital firm.

.. The growing market has also captured the interest of the Trump administration, which has vowed to expand the partnerships with the private sector that began under former presidents George W. Bush and Barack Obama. During Thursday’s Cabinet meeting, Trump lauded SpaceX’s Falcon Heavy and took a shot at NASA, saying that if the government built a similar rocket, it “would have cost probably 40 or 50 times” what SpaceX charges.

Glenn Reynolds: I’ll believe it’s a crisis when they start acting like a crisis

For years, professor Glenn Reynolds, a.k.a., the Instapundit, has examined high-profile climate-change activists and responded skeptically, “I’ll believe it’s a crisis when they start acting like a crisis” — i.e., they believe the problem can only be solved with punitive measures like higher energy costs, but refuse to make any discernable sacrifices themselves.

There’s no shortage of glaring contradictions. When the Paris Conference certified itself as carbon-neutral, they didn’t count the carbon emissions of the 40,000 attendees traveling to and from the conference. One round-trip flight from New York to the West Coast or Europe has a warming effect equivalent to two or three tons of carbon dioxide per person. Richard Branson, who owns an airline, spoke at a march about climate change recently. Self-described environmentalist Leonardo DiCaprio continues to crisscross countries in his private jet. Al Gore made $500 million selling his television network to Al Jazeera, a network owned and funded by the Qatari royal family, which enjoys the world’s third-largest oil and natural gas reserves. Gore has a giant home in Tennessee, although maybe not as big as Thomas Friedman’s 11,000-square-foot mansion in Maryland; he wrote in one of his books the construction of the giant house “prevented it from being redeveloped into a subdivision of a dozen more houses.” He’s willing to live in luxury to avert the carbon footprint of those other families.

The celebrities are the most glaring examples, but you can find non-famous cases of environmentalist hypocrisy, too. Residents of Park Slope, Brooklyn, filed a lawsuit against a bike lane. Cape Cod, Mass., residents fought the construction of a wind farm off the coast. Berkeley, Calif., residents fought the establishment of bus-only lanes on roads.

Now, in the years and years Americans have been debating climate change and what to do about it, have you ever heard an environmentalist say, “You know, you’re right. We really do look like we’re not practicing what we preach. We really do look like we’re telling other people to make sacrifices we’re not willing to make ourselves. The glaring hypocrisy of these figures really undermines the message we want to communicate”? If so, please point out those statements; I haven’t found many.

.. Environmentalists fume at the average voter’s inability to see the big picture and the long-term consequences. They think Americans are insufferably entitled, way too focused on their own individual material and financial circumstances, unwilling to see how their decisions collectively impact everyone else, and stubbornly resistant to data, numbers, and bad news. They insist that the collective shrugging belief that someone else will solve the problem someday is willful blindness. They fume that the status quo is one of worsening circumstances, but moving so slowly and gradually that most people can ignore it. By the time the crisis is really visible, it will be too late; the only way to mitigate the problem at that point will be drastic, unpopular action and widespread sacrifice. They believe that whatever pain they’re proposing now, it’s exponentially milder than the pain that awaits us if we do nothing.

Perhaps we should have a little sympathy. When they talk like this, they sound a lot like us conservatives when we talk about the ticking time bomb of our entitlement programs and the need for reform

Bill Gates, Others Launch Clean Energy Fund

The $1 billion Breakthrough Energy Ventures will invest in companies that make clean energy cheaper

 .. Fellow investors include Amazon.com Inc. Chief Executive Jeff Bezos, LinkedIn Corp. Chairman Reid Hoffman, Alibaba Group Holding Ltd. Chairman Jack Ma, and retired hedge fund manager John Arnold.
.. Members include billionaires Tom Steyer, George Soros and Richard Branson, and the University of California.
.. Reducing the cost of renewable energy, such as wind and solar power, and making it cheaper to add more of this power to the grid are areas the fund would likely support, Mr. Gates said in an interview.
.. While current clean-energy technologies should be used as much as possible, the technologies that will enable the U.S. and the world’s other major economies to cut greenhouse gas emissions to zero by 2050 will be invented in the next 10 to 20 years, Mr. Gates added.
.. “By 2050, at least the large countries in the key sectors have to essentially be at zero,” he said.
.. Mr. Gates said that he and other investors want to convince the Trump administration to maintain or increase government funding for energy research and development.
.. U.S. venture-capital equity financing has fallen for new energy and other clean technology companies, to $2.2 billion this year through September, from $5.7 billion in 2011
.. More investment in next-generation technologies, such as power storage, could help solve some of the problems that come from generating more power from wind and sunshine, some energy industry participants and analysts said.

Richard Branson: Trump vowed to destroy 5 people who refused to help him

Branson wrote. “Even before the starters arrived he began telling me about how he had asked a number of people for help after his latest bankruptcy and how five of them were unwilling to help. He told me he was going to spend the rest of his life destroying these five people.”

Branson “found it very bizarre” that Trump was unwilling to talk about anything else. “I told him I didn’t think it was the best way of spending his life. I said it was going to eat him up, and do more damage to him than them,” Branson wrote. “There must be more constructive ways to spend the rest of your life.

.. Branson highlighted the real estate mogul’s “vindictive streak” as the most frightening thing about this election, warning it “could be so dangerous if he got into the White House.”