Tracy Alloway: Joe, obviously there's a lot going on right now in the Gulf. One of the things that's been happening is that Iran, of course, has been sending drones across the sea and over to the UAE and hitting various energy infrastructure assets, but it's also been hitting some non-energy infrastructure assets such as hotels, you know, consulates, residences.

Joe Weisenthal: right? Of course, um, you know, we've seen, for example, the various strikes. We're going to talk about Dubai specifically in this episode. The interesting thing about Dubai, as we know, is there's been a lot of people who moved there. Lots and lots of money to say the least. But part of the appeal there is here is an island of stability.

Joe Weisenthal: Not just an island of stability within the context of the Middle East. There is this growing perception all around the world particularly in rich countries where people don't like what's going on with taxes where they don't like feel safe about the trajectory of politics in these countries etc. this sort of ongoing feeling of deterioration of various flavors where they're from and it's like you know what I want to live in a country that has low crime a high level of stability and sort of you know to be crude escape the failing west exit as they say and sort of the idea of exit loyalty and voice and so forth.

Tracy Alloway: right so this is really interesting because in addition to styling itself as this sort of island proverbial island of stability... they've also styled themselves as, and I'm stealing this from um the guest that I will introduce in just a minute or two, but they've styled themselves as the capital of capital. Yeah. Right. So, here is this region that has an enormous amount of money from oil wealth. And a lot of that money has been flowing into not just real estate in the region itself, but real estate externally in the west. We know that there are big sovereign wealth funds in the Middle East and they invest in all sorts of things lately. There's been a lot of private debt investment um which is an interesting one given the concerns around uh private lending at the moment.

Joe Weisenthal: Absolutely. And again, like this is a place where those with means, those with like lots of money are feeling like this is arguably the future. This is where I want to set up shop. Ray Dalio has a family office that's in the UAE and so forth. And you know, historically there have been these places, these places where capital wants to be either have a literal or sort of figurative footprint. Switzerland of course long time in that category. Singapore perhaps similar but you have people in the west uh you have a lot of people in the UK and you're like you know what this is where I'm going this is my bet on the future right I'm betting my future the future of my money the future of my business somehow to be doiciled figuratively or literally in Dubai the UAE etc.

Hiten Samani: I think for the most part it's correct. I would add to it. So, not only is it styled itself as a safe haven to do business, I think where it has probably gone further than any country in the modern era is cherrypicking the kind of society that an ultra- person would think about, too. So there's one thing to be in Singapore and say, "All right, make your money here, but we have a Singaporean society that is very specific, right? In in Abu Dhabi, Dubai, etc., it's almost like a build your own bear kind of society.

Hiten Samani: Okay, you're a wealthy person, come here. The only rule is don't mess with our politics. You're never getting involved in anything related to any sort of democratic debate. Outside of that, you want to live a decadent lifestyle, we have everything set up for you. You want to live a pious lifestyle, it's all set up, too. We will guarantee you safety. And that's obviously the big asterisk why we're talking today. We'll guarantee you safety. We'll guarantee you an incredibly pro business environment.

Joe Weisenthal: I don't know what people do there. I don't know if people work. I don't know if anyone actually does work. The only thing, you know, I see the Instagram photos, etc. But like talk to us about the scale of the influx particularly among the global elite and to what degree is it a real phenomenon you see people talk about this on Twitter of like a certain type of people who has kind of given up on the west and they're willing to take that tradeoff.

Hiten Samani: There is that cohort of sort of disgruntled, let's say, upper middle class to wealthy people from places like the UK, etc. That's one class, and I think that is culturally much more significant than it is financially significant. Okay. The other class and I think the the inflection point that is probably the most logical to take is the Russian invasion of Ukraine. Right around early 2022 there was this unbelievable influx of people from uh let's call it Russian Republic... and now you look at parts of Dubai that have been transformed by, let's call it, Russian wealth, right? There are parts of Dubai that look exactly like Sunny Isles Beach in Miami, which is Russian wealth, Russian dominated.

Hiten Samani: the city Dubai specifically is home to about 3.8 million people at the moment. I think when I was growing up there in the '90s that was number was probably close to 2 million and it's expected to surge by to 5.8 million by 2040. So you're talking about adding 2 million people to the city in what 15 years or so, right?... they're doing that with the infrastructure. They're doing the cloud seating for the weather. They're trying so many different social experiments for cohesion.

Tracy Alloway: What have you seen just in terms of property prices in Dubai in recent years?

Hiten Samani: I think a lot of the sort of the explosion of growth in Dubai can be seen can be seen in land prices. Land prices are up by a factor of 40 to 70%. Uh and this all stems from the super luxury boom that Dubai has seen... Dubai is is leading the charts for a long time. I think in Q3 they had north of $2 billion of sales just in the super prime category... developers can get that kind of pricing for condos and homes, they then go and buy more more and more land... they're going and getting some exotic financing for it... dollar bond and suk issuance has grown more than 12fold to $6 billion since 2021.

Joe Weisenthal: You have your Russians, you have your other Eastern Europeans, you have your Iranians... and yet everyone sort of merges into the same guy if you know what I mean. They sort of dress the same. They drive the same cars. They kind of talk the same. There is this sort of, I would say, ethnically ambiguous Miami guy... Is it sort of true in Dubai? Do you have this sort of nominally diverse population, but then when they're there, they suddenly fuse into Dubai guy?

Hiten Samani: 100% 100%... the difference between what you talked about, Joe, and what happens in Dubai is it's not necessarily a melting pot. It really is like it is it is an it is a collection of ethnic enclaves, right? And the only thing they have in common is that they live in Dubai, you can spend your entire life sort of ghettoized in your with your type of people.

Hiten Samani: The Horatio Alger stories in Dubai tend to be the person who's come in and made the life for themselves, right? The scrappy entrepreneur... That is the kind of story you do not typically see social mobility within the city, right? So, if you are part of what you described as the social underclass, you tend to stay in that role until you leave and you will always leave, right?

Tracy Alloway: Talk to us about what you're hearing just on the ground in Dubai at the moment because the information flow is a little bit tricky. Um, the UAE controls the information that not only circulates domestically but also circulates externally.

Hiten Samani: overwhelmingly the message is that things are okay and life is moving on... the UAE has to project an image of an oasis of calm and stability. Right? I I like to say that New York is a great city any day of the week, any weather at all times. Los Angeles has to be on its best, you know, best weather behavior at all times. And there is a similar analogy to be made at the UAE. The whole game does not work unless it feels safe.

Hiten Samani: the Iranians uh struck uh an LNG facility in Qatar... he said that it took out 17% of Qatar's export capacity. That is a stunning revelation to make... he said they might have to invoke force majour contracts on exports to certain countries. Right? That is that is the kind of thing that should give people pause, right?

Tracy Alloway: But I just want to talk for a second about where golf money has actually been flowing uh externally in the world because this has been a big story but still an underappreciated one I think... defining story of the investment landscape of the last 10 years.

Hiten Samani: GCC sovereigns collectively... manage close to $6 trillion in AUM. that represents more than 40% of the global sovereign wealth fund total right... they've been flowing towards let's call it more exotic alts right they're in crypto they're massively invested in in venture capital... when PNC sold a 14 billion stake in Black Rockck around in the pandemic at some point the buyers were Moubadla KIA... QIA... and PIF.

Hiten Samani: this all comes back to a trend that we like to call AUM goblin right so you cannot there's no such thing as a good midsize fund anymore... all roads lead to Abu Dhabi when it comes to that kind of thing... PIF, I believe, is the anchor investor in... Blackstone's infrastructure fund, which is their quote lens into the AI boom. MGX is a partner in this uh really stop and start government project, the US government called Stargate, uh with Open AI, etc.

Joe Weisenthal: obviously you know we know that it may have been his first foreign visit right since taking uh the presidency Trump quickly went to the Gulf... Trump has golf tastes, right?

Hiten Samani: the way that people in New York think of the Trump brand is tacky luxury. Tacky luxury. Right. In the Gulf, it's thought of as luxury luxury. Right. Uh it's it's always been there. They're sympatico in so many ways. Uh from kind of having incredible control over their societies...

Hiten Samani: We have seen though a couple of very influential businessmen Khalif Hur... had had put out a letter kind of excoriating Trump for starting this conflict at the behest of at the behest of Israel. Right. And this was a this was a big big deal for a a statesman level businessman in the UAE to to talk about this.

Hiten Samani: There is a tower that's coming up which is called Iwa, which is a 21story residential tower designed to look like the Hallelujah Mountains from the Avatar movies... They're doing Manhattanike skinny super talls now as well... a 17 to 1 height to width ratio, which is the kind of skinny pencil tower that you would see on Billionaire's Row.

Hiten Samani: When you enter the Dubai airport now... you will see these giant, absolutely giant interactive ads about all ethnicities... You're seeing Usuzbcks. You're seeing Canadians... and it says specifically Canadians, this is your Dubai. Usbex, this is your Dubai, etc. They are pushing this beyond.

Joe Weisenthal: the converse of that is that they can leave, right? like if if for whatever reason they don't feel safe or they just think like you know what now is the time for a really long vacation somewhere else in the world they can go... Dubai is ground zero for this phenomenon where you have an extremely rich welloff... for a society that has access to every luxury experience that you could possibly think of and then there is this layer of people that will never ascend to that despite living in the same country.