Goldman Sachs Group is tapping its upper echelons to navigate a notoriously complicated region where it has stumbled of late: West Asia.
After missing out on at least $25 billion in deals in Abu Dhabi — the emirate that snubbed the US bank for its involvement in the 1MDB scandal — Goldman Sachs is making a push into Saudi Arabia.
Chief Executive Officer David Solomon — the first chief of a Wall Street bank to visit the kingdom following the murder of journalist Jamal Khashoggi — has turned to international banking head Richard Gnodde and former Donald Trump adviser Dina Powell to help lead the push. They’ve all spent months wooing top officials in Riyadh, vying for a slice of the world’s biggest initial public offering, people with knowledge of the matter said.
The charm offensive is paying off: The bank is considered one of the strongest contenders to get a lead role on Saudi Aramco’s mammoth offering. The deal promises to open the door to more lucrative mandates as the nation opens up to foreign investment and plans to privatize hundreds of state assets.
Saudi Arabia is becoming the focus of Goldman Sachs’ West Asia strategy after the fallout from the 1MDB corruption scandal marked its abrupt downfall in Abu Dhabi, once one of its most lucrative markets in the region. Dealings with Qatar have become more complicated amid its diplomatic clashes with the kingdom. Global banks, including JPMorgan and Credit Suisse Group, are investing in Saudi Arabia as it promises some of the world’s biggest deals.
“Saudi Arabia is a goldmine of potential investment banking revenues for Goldman Sachs in the Middle East,” said Gary Dugan, chief executive officer of Singapore-based Purple Asset Management. “They will need success on Aramco to offset the door closing in their face in Abu Dhabi.”
A spokesman for Goldman Sachs declined to comment.
Goldman Sachs had been the go-to bank for many of Abu Dhabi’s top dealmakers, but has missed out on billions of dollars of deals after being sued by two of its investment funds. The bank is accused of misleading investors when it helped 1MDB raise $6.5 billion through bond deals in 2012 and 2013, while allegedly knowing that the funds would be misappropriated. The firm has denied culpability in the scandal and laid the blame on Tim Leissner, a former partner who has pleaded guilty.
Despite the fallout, Goldman Sachs continues to speak with companies in Abu Dhabi and seek new business there, one of the people said.