JPM JP Morgan Chase and Co

By Nicolas Parasie and Asa Fitch 

DUBAI -- Russian and Asian executives and midlevel Western bankers will attend a Saudi Arabian investment conference this week that will be less splashy and global than its inaugural last year dubbed "Davos in the Desert."

Hundreds of Saudi officials and advisers are rushing to salvage the Future Investment Initiative, known as FII, as Western executives canceled in the wake of revelations that the kingdom's operatives killed Saudi journalist Jamal Khashoggi on Oct. 2 in the Saudi consulate in Istanbul. It is an important project of Crown Prince Mohammed bin Salman, who has courted international investors in his bid to remake his kingdom's economy.

Middle Eastern, Russian and Japanese companies look to be a larger proportion of the attendees compared with last year, when FII was a sort of global coming-out party for Saudi Arabia and its relations with Western money. Prince Mohammed courted American executives, including the chiefs of JPMorgan Chase & Co. and Blackrock Inc. and announced a new $500 billion city largely aimed at drawing foreign investments.

RDIF, the Russian sovereign-wealth fund, has come out in strong support of FII, putting together a delegation of "more than 30 leading Russian entrepreneurs and leaders of major Russian companies, as well as public figures."

"Relations between the Russian Federation and Saudi Arabia are rapidly developing," said RDIF's chief, Kirill Dmitriev.

Conference organizers have added speakers from the Arab world, too. The head of Abu Dhabi sovereign fund Mubadala and Dubai conglomerate Majid Al Futtaim are now listed as participants on one of the event's many panels. Executives from Russia and China are also newly listed.

An FII spokesman said the three-day event would include heads of state from the Arab world, Africa and Asia. He wouldn't say which leaders were coming.

Prince Mohammed called new Pakistani Prime Minister Imran Khan and asked him to attend, Pakistani officials said. Mr. Khan confirmed he will go.

A number of Asian executives, including the chief executive of Japan's biggest bank, have withdrawn from the conference, but others remain on a list of speakers at the conference, including Norihiro Takahashi, the president of Japan's Government Pension Investment Fund.

The situation is trickier for Western financial institutions, which piled into Saudi Arabia after Prince Mohammed launched his economic-modernization plan in early 2016 but have since distanced themselves since Mr. Khashoggi's death. U.S. Treasury Secretary Steven Mnuchin, JPMorgan CEO James Dimon, Blackrock head Larry Fink and and Uber Technologies Inc. Dara Khosrowshahi are among dozens of executives and government officials who have bailed on FII.

Still, employees of about a dozen major banks were registered to attend the conference as of Sunday, according to a database on FII's mobile app. Among them: Credit Suisse Group AG, Société Générale SA, Citigroup Inc., and the New York-based investment banks Evercore Partners Inc. and Moelis & Co., people familiar with the matter said.

Bankers attending the FII are mainly there for networking purposes. It is a useful opportunity for banks to rub elbows with important clients in an important market and a form of courtesy toward the Saudis. Not attending could hurt their chances of winning future mandates.

One senior banker said Western banks didn't want to burn bridges in Saudi Arabia, where the kingdom is taking on debt at a near-record pace and trying to link its economy with technology giants in Silicon Valley like Tesla and Uber.

Some have asked to be removed as speakers on various panels, a request with which the Saudis have complied. "They understand the pressure we are all under," one person at a major international bank said.

Ellen Wald, an energy analyst and president of Transversal Consulting, said there would be plenty of talks at the conference, even if Western companies avoid the stage. "That's not where anything happens anyway," she said of panels.

"There's no indication that businesses are pulling out entirely -- even if a CEO isn't there, that doesn't mean there's nothing going on," she said.

Even though they have taken a more low-key approach, some bankers say the conference has become a public-relations nightmare.

"We hope they will cancel, frankly," the person at the international bank said.

FII organizers said the conference will go on.

Write to Nicolas Parasie at nicolas.parasie@wsj.com and Asa Fitch at asa.fitch@wsj.com

(END) Dow Jones Newswires

October 21, 2018 16:32 ET (20:32 GMT)

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