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|14 February, 2019

Saudi equities make up 75% of PIF's assets, says fund's chief

Yasir Al-Rumayyan tells Abu Dhabi conference that local equity investments outweigh holdings in major projects, other real estate and infrastructure assets

Image used for illustrative purpose.

Image used for illustrative purpose.

TADAWUL

Saudi Arabia’s sovereign wealth fund has four folds of investment, of which local equities represent three quarters of its assets under management, the fund’s chief has said.

“The four folds of investments that we have in Saudi by the sovereign fund are Saudi equities, and that represents 75 percent of our assets under management, the giga-projects like NEOM, Red Sea and Qiddiya… then we have real estate and infrastructure, and finally we have the sector development,” Yasir Al-Rumayyan, managing director of the kingdom’s Public Investment Fund (PIF), said at a conference in Abu Dhabi.

PIF currently holds stakes in Saudi majors that include National Commercial Bank (NCB), Saudi Telecom and Saudi Basic Industries (SABIC), among others.

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Although the Saudi sovereign wealth fund currently holds the majority of its investments domestically, with only 10 percent of assets held internationally, it aims to raise its global investment allocation to 50 percent by 2030, Al-Rumayyan, who heads the PIF, told an investment conference in Riyadh in October last year. (Read more here).

PIF’s current allocation of investments is in contrast with neighbouring Abu Dhabi’s sovereign wealth fund, Mubadala, which holds more than 80 percent of its assets overseas. (Read more here).

In October last year, Reuters reported that PIF was indirectly supporting local stocks, through local institutions, to limit the stock market turmoil that followed the killing of Saudi dissident Jamal Khashoggi. (Read more here).

In the fourth quarter of last year, the Saudi government’s reserve dropped by almost $23 billion, with December recording the highest portion of this drop, in what some analysts attributed to likely transfers between government accounts or entities, including the PIF, among other factors. (Read more here).

Speaking at Milken Institute MENA summit in Abu Dhabi on Wednesday, Al-Rumayyan said that the fund aims to develop non-oil industries and diverse sectors in the kingdom, including the expanding entertainment industry, to preserve the country’s oil wealth. (Read more here).

He also said that the fund plans to raise its stake in ACWA Power to 40 percent, up from 25 percent, as it plans to push a renewable energy drive in the kingdom. (Read more here).

PIF now has $360 billion in assets, according to the Sovereign Wealth Fund Institute.

A long list of the kingdom’s multi-billion dollar projects are backed by the state’s sovereign wealth fund, such as the $500 billion NEOM project announced in 2017 and the huge Qiddiya entertainment complex. (Read more here and here).

Saudi sovereign wealth fund has been investing aggressively globally, with high-profile investments in Uber Technologies, Softbank’s Vision Fund and Tesla, among others, and plans to expand overseas with offices in London, New York, and San Francisco.

(Reporting by Nada Al Rifai; Editing by Michael Fahy)

(nada.rifai@refinitiv.com)

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Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here

© ZAWYA 2019

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