RIYADH: The publically owned Saudi Public Investment Fund is looking set to become one of the world’s most powerful sovereign funds after a sudden burst deal making, UK daily the Financial Times has reported. The previously little known and generally inactive holding fund PIF will likely reap the benefits when Saudi completes the initial public sale of Aramco, which is due next year. It is expected the initial five percent floatation of Saudi Aramco will raise $100 bln. At the recent World Economic Forum PIF chief executive Yasir al-Rumayyan was seen attending a packed schedule of meetings with executives from private equity groups BlackRock and Blackstone the report added. Last year saw PIF turn around with investments such as the $3.5 bln with Uber, which came after an agreement was reached to invest $45 bln in a partnership with Japan’s SoftBank to launch a new $100bn technology fund.
Estimates by one banker suggest PIF’s assets could increase from $190 bln to $500 bln – and that’s before Aramco’s IPO. The expected expansion has seen investment in extra staff, not least young Saudi professionals. “They are mainly western educated . . . very ambitious, hungry people,” one banker who has worked with PIF told the newspaper. It’s all part of the ripple effect from Saudi’s Deputy Crown Prince Mohammed Bin Salman, who has been tasked with leading the kingdom in its efforts to diversify its oil reliant economy. PIF was created in 1971 and now has a portfolio of 200 investments and looks to be a vital part of the Deputy Crown Prince’s national transformation plan. The aim of the future plans is to see the creation of technology companies that will attract young Saudis into the private sector – something that is seen as essential to Mohammed Bin Salman’s plans.
