8 big-ticket investments by the Saudi PIF

As part of efforts to diversify its economy away from oil, Saudi Arabia’s largest sovereign wealth fund, the Public Investment Fund (PIF), has committed to significant investments overseas and within the Kingdom.

Under Vision 2030, PIF expects to increase its assets from SAR 840 billion to SAR 1.5 trillion by 2020, according to the International Monetary Fund’s (IMF) estimates.

IMF has listed out the capital committed by PIF in key organizations and sectors, both domestically as well as around the world. Argaam takes a look:

1) Softbank Vision Fund (SAR 169 billion)

In October 2016, PIF and Japan-based Softbank Group agreed to set up a technology investment fund, the Vision Fund, to which PIF committed an investment of $45 billion over the next five years.

2) Blackstone Infrastructure Fund (SAR 75 billion)

3) Egypt Investment Fund (SAR 60 billion)

In March this year, PIF and the Egyptian Ministry of Investment and International Cooperation agreed to set up a $16 billion Egyptian-Saudi investment fund. The objective of the fund is to channelize Saudi investments in a number of projects across Egypt.

4) Russian Direct Investment Fund (SAR 37 billion)

In October last year, the Russian Direct Investment Fund and PIF agreed to set up a Russian-Saudi platform for investment in Russian technology companies. “The total investment under this new initiative to invest in technology is targeted to be $ 1 billipn,” a statement from RDIF said.

A couple of years back, in October 2015, PIF had signed a deal with the Russian Direct Investment Fund (RDIF). As per the deal, PIF agreed to invest $10 billion in Russia over the next five years.

5) Uber (SAR 13 billion)

In June 2016, PIF injected $3.5 billion in US ride-hailing service Uber. As part of the investment, Yasir Al Rumayyan, managing director at the Saudi fund, would take a seat on the company’s board, Reuters then reported citing an Uber statement.

6) Virgin Galactic (SAR 4 billion)

In October 2017, PIF signed an agreement to invest approximately $1 billion into Virgin Galactic, The Spaceship Company and Virgin Orbit. The deal also included an option for $480 million of future additional investment in space services, PIF said.

7) Magic Leap (SAR 1 billion)

PIF invested $400 million in US-based augmented reality startup Magic Leap in February this year. With this investment, PIF joined a list of global shareholders into Magic Leap, including Google, Alibaba Group, Qualcomm Inc., Time Warner’s Warner Bros and J.P. Morgan Investment Management.

8) Land at Mecca (SAR 70 billion)

As part of its domestic investment to boost Saudi economy, PIF has large equity holdings in key sectors of the Saudi economy including in petrochemicals, financial services, mining, telecommunications, and utilities, IMF report notes.

Among the most recent ones is its purchase of land from the government in 2017 worth (SAR 70 billion) to support its project to increase hotel and housing capacity in Mecca. According to IMF, this year PIF is expected to invest further SAR 83 billion in the domestic economy.

IMF expects PIF financing to come from capital injections and asset transfers from the government, borrowing, and retained earnings.

Write to Sunil Kumar Singh at sunil.kumar@argaamplus.com