Saudi PIF, Blackstone ink deal for $40 bln US infrastructure fund

Saudi Arabia’s sovereign wealth fund and New York-based private equity firm Blackstone Group on Saturday said that they plan to create a $40 billion fund to invest in infrastructure projects, mainly in the US.

The Saudi Public Investment Fund (PIF) signed a memorandum of understanding (MoU) with Blackstone to commit an anchor investment of $20 billion to the fund, Blackstone said in a statement, adding that an equal amount will be raised from other investors.

“Overall, through the equity in this vehicle and additional debt financing, Blackstone expects to invest in more than $100 billion of infrastructure projects, principally in the United States,” the statement said.

The MoU is non-binding and the parties will continue their negotiation to agree definitive documentation.

“This potential investment reflects our positive views around the ambitious infrastructure initiatives being undertaken in the US as announced by President Trump, and the strategic opportunity for the PIF to achieve long-term returns given historical investment shortfalls,” said PIF managing director Yasir Al Rumayyan.

The new program is expected to help the US address its significant need for infrastructure improvement, Blackstone said.

Independent estimates put the country’s infrastructure funding gap at up to $2 trillion, requiring substantial domestic and international private sector investment, the statement added.