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Abu Dhabi, UAETuesday 20 November 2018

Saudi Arabia’s PIF targets $2 trillion portfolio by 2030

The sovereign wealth fund currently has just short of $300bn in assets under management

Chief executive and managing director of Saudi Arabia's PIF onstage at FII. He said the fund is looking to increase its investments abroad. Reuters
Chief executive and managing director of Saudi Arabia's PIF onstage at FII. He said the fund is looking to increase its investments abroad. Reuters

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is targeting to increase its portfolio of assets to $2 trillion (Dh7.3tn) by 2030 as it aggressively invests in both domestic and international markets.

“Today we are short of $300bn in assets under management. The number would be $400bn by 2020 and we are targeting for the fund to be the size of $2tn in 2030,” Yasir al-Rumayyan, the managing director of PIF told delegates at the Future Investment Summit in Riyadh on Tuesday.

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.

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 25 and 75 per cent balance between international and domestic, respectively, and by 2030 aims to have a 50-50 split between the two, he said.

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“That doesn’t mean that we are scaling down our domestic investments ... we are growing,” Mr al-Rumayyan said. “We will have a lot of new investments domestically and a lot internationally.”

PIF, which is at the heart of Saudi Arabia’s economic transformation agenda, is mandated to invest and grow local industries while at the same time invest abroad in assets to generate returns for Riyadh, which seeks to generate alternative revenue lines in the wake of the three-year oil price slump.

In the domestic market, PIF holds stakes in some of the region’s biggest companies and financial institutions including Sabic, the top petrochemicals producer in the Middle East; mining giant Ma'aden and the kingdom’s largest telecommunications operator STC. It also owns stakes in National Commercial Bank and Samba Financial Group, two of the biggest lenders in the country.

PIF is a cornerstone investor in SoftBank Group’s $93bn Vision Fund with a $45 billion contribution, and Mr al-Rumayyan said it has invested in about 50 to 60 companies through Softbank’s vehicle so far.

Most of these companies would come to the kingdom to help diversify the economy and generate employment, he said.

PIF will continue to invest in the technology sector, which can offer investment returns that are “very difficult to achieve in some of the conventional investments," Mr al-Rumayyan said.