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Abu Dhabi, UAESunday 17 February 2019

PIF to open offices abroad as it seeks to boost foreign investments

The Saudi sovereign wealth fund also wants to increase its stake in Acwa Power

Saudi Arabia's Public Investment Fund is diversifying its portfolio and increasing its international presence its managing director Yasir Rumayyan said. Pawan Singh / The National
Saudi Arabia's Public Investment Fund is diversifying its portfolio and increasing its international presence its managing director Yasir Rumayyan said. Pawan Singh / The National

The Public Investment Fund, Saudi Arabia's sovereign wealth fund with around $300 billion (Dh1.10 trillion) in assets under management, plans to open offices in London and the US as it seeks to snap up more international assets, its managing director said.

"PIF is not going to be only in Riyadh. We are working on opening up in London and the US, initially in New York and San Francisco and any other cities we feel we should be closer to our business," Yasir Al Rumayyan told the Milken summit on Wednesday in Abu Dhabi.

PIF aims to increase its portfolio of assets to $2tn by 2030 as it aggressively invests in both domestic and international markets. The fund, which has historically invested in the domestic market on behalf of the Saudi government, has expanded its international investments to 10 per cent of its total asset base in four years, up from about 1 per cent, Mr Al Rumayyan said last year.

PIF, which holds stakes in the US ride-hailing company Uber and electric car makers Tesla and Lucid, in the medium-term would like to achieve a 25 and 75 per cent balance between international and domestic assets in its portfolio, and by 2030 aims to have a 50-50 split between the two.

PIF is an anchor investor in SoftBank's $100bn Vision Fund with a $45 billion contribution. The fund also agreed to tie-up with investment company Blackstone in 2017 for a new venture designed to invest more than $100bn in US infrastructure assets.

PIF will commit $20bn to the venture, which is expected to have $40bn in total equity commitments in a permanent capital vehicle.

The fund could also raise its stake in Saudi Arabia's Acwa Power to 40 per cent from 25 per cent, as it seeks to develop more renewable projects in the kingdom and manufacture solar panels in the country, Mr Al Rumayyan said on Wednesday.

"We will be the largest investor in renewable energy in solar panels and PVs (photo-voltaic). We have sun and sand. Our target is to have 200 gigawatts to 400gw of production and installation (of solar power),” Mr Al Rumayyan said.

PIF will develop 70 per cent of the kingdom’s renewable energy capacity in line with plans to install 60gw of cleaner sources over ten years as the kingdom looks to free up more crude for export, the country's energy minister Khalid Al Falih said in January.

"The PIF and its selected partners will develop 70 per of the total renewable energy capacity with the objective of accelerating localisation of our manufacturing capability,” said Mr Al Falih. "While the ministry through the Repdo [Renewable Energy Project Development Office] will continue to drive breakthrough prices through the kingdom by competitively tendering the remaining 30 per cent."

Saudi Arabia last year announced it was adding substantial renewable capacity to grid through its newly established Repdo within the kingdom’s energy ministry. Around 9.5gw of solar and wind capacities will be tendered for development by 2023, as Saudi Arabia moves its power generation away from fossil fuels.

"Oil is very important to us and we think there will be more industries that will have oil input, [such as] oil-to-chemcials," said Mr Al Rumayyan.

PIF also plans to invest more in food security, waste management and entertainment.

Although the fund is keen to invest abroad, it wants its international investments to benefit the Saudi economy, he added.

"We are bringing back some of these companies to Saudi Arabia to improve the local domestic economy and at the same time increase local content," he said

Updated: February 13, 2019 12:46 PM

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