Black­stone, SoftBank deals put Saudi wealth fund on map

New Straits Times - - Business -

RIYADH: Saudi Ara­bia plans to ex­pand its sov­er­eign wealth fund into the world’s largest. The king­dom took a huge step to­wards that goal on Satur­day when it signed bil­lions of dol­lars of deals with Black­stone Group LP and SoftBank Group Corp.

The Pub­lic In­vest­ment Fund (PIF) is at the cen­tre of Saudi Ara­bia’s ef­forts to di­ver­sify rev­enue away from oil un­der an eco­nomic trans­for­ma­tion plan known as Vi­sion 2030. The fund could even­tu­ally con­trol more than US$2 tril­lion (RM8.59 tril­lion), said Deputy Crown Prince Mo­hammed Sal­man.

The sale of a less than five per cent stake in Saudi Ara­bian Oil Co (Aramco) to the pub­lic will pro­vide funds for in­vest­ment.

“We want to be an in­vest­ment pow­er­house,” said PIF man­ag­ing di­rec­tor Yasir Al­ru­mayyan at an event that gath­ered top Saudi of­fi­cials and Amer­i­can cor­po­rate ti­tans, here.

The PIF’s deal­mak­ing has quick­ened this year as it seeks to in­crease the pro­por­tion of for­eign hold­ings to 50 per cent from five per cent, ex­clud­ing Aramco.

The PIF agreed to com­mit US$20 bil­lion to an in­fra­struc­ture in­vest­ment fund with Black­stone, the world’s big­gest pri­vate-eq­uity man­ager.

Black­stone plans to raise the same amount from other in­vestors and with lever­age, the as­set man­ager ex­pects to have more than US$100 bil­lion in pur­chas­ing power for in­fra­struc­ture pro­jects pri­mar­ily in the United States.

The deal is non-bind­ing and its terms are still be­ing ne­go­ti­ated.

Saudi Ara­bia and SoftBank for­mally an­nounced the first close of fundrais­ing for the largest-ever tech­nol­ogy in­vest­ment fund on Satur­day. More than US$93 bil­lion has been se­cured from back­ers led by the PIF and the Ja­panese com­pany, and the fund could grow to US$100 bil­lion.

The PIF didn’t dis­close the size of its in­vest­ment, but Sal­man agreed to po­ten­tially in­vest up to US$45 bil­lion in the fund over five years af­ter a meet­ing with SoftBank’s Masayoshi Son.

The PIF also in­vested US$3.5 bil­lion in Uber Tech­nolo­gies Inc last June, mark­ing its ar­rival as a ma­jor global in­vestor. The deal val­ued Uber at US$62.5 bil­lion and gave Al­ru­mayyan a board seat at the firm. Bloomberg

Pub­lic In­vest­ment Fund’s planned in­vest­ment in Black­stone’s

in­fra­struc­ture fund

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.