Saudi Arabia commits $20B to U.S. company
As President Donald Trump began his first official trip abroad in Saudi Arabia, an investment company run by one of his top supporters, billionaire Stephen Schwarzman, secured an enormous investment from the Middle Eastern kingdom.
The company, Blackstone, which Schwarzman helped found, said on Saturday that Saudi Arabia’s sovereign wealth fund had committed $20 billion to a new investment fund aimed at infrastructure projects primarily in the United States.
The commitment is about half of the capital Blackstone plans to raise for the fund. All told, including potential borrowed money, the new fund could invest more than $100 billion in infrastructure projects, the company.
The fund was one of several business deals between a U.S. company and Saudi Arabia announced after Trump’s arrival. At a ceremony in Riyadh, Saudi Arabia, on Saturday, General Electric said it had agreements for $15 billion worth of projects.
And the Trump administration helped line up $110 billion worth of arms deals, negotiations in which the president’s senior officials played prominent roles. For instance, Jared Kushner, Trump’s son-in-law, personally called the chief executive of Lockheed Martin to help reduce the price of a radar system.
Lockheed Martin has since announced, among other deals, a $6 billion commitment to building 150 Black Hawk helicopters in the kingdom.
In its statement Saturday, Blackstone said it had begun discussions with Saudi Arabia about a year ago. The U.S. investment company said it had already invested in over $40 billion worth of projects tied to infrastructure over the last 15 years.
Investing in U.S. infrastructure has been advocated by lawmakers and business leaders for some time, with both Trump and Hillary Clinton endorsing modernizing aging airports, bridges and energy systems through publicprivate partnerships.
Yasir Al Rumayyan, the managing director of Saudi Arabia’s Public Investment Fund, added: “This potential investment reflects our positive views around the ambitious infrastructure initiatives being undertaken in the United States as announced by President Trump, and the strategic opportunity for the Public Investment Fund to achieve long-term returns given historical investment shortfalls.”
For Saudi Arabia, the new fund is another step toward diversifying its enormous oil-based economy. The kingdom has also announced a plan, called Vision 2030, to list its state-owned oil producer, Saudi Aramco, on the public markets.