Blackstone, SoftBank deals put Saudi wealth fund on map

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