Saudi sovereign fund’s investments abroad

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Time: October 17, 2018   

A vehicle drives past the King Abdullah Financial District in Riyadh, Saudi Arabia, October 18, 2017. Picture taken October 18, 2017. 

DUBAI – Saudi Arabia’s sovereign wealth fund has pursued eye-catchinginvestments abroad over the past several years, part of reform plans to diversify the economy beyond oil and transform the country into a high-tech investment powerhouse.

The Public Investment Fund‘s pledges are now in the spotlight as the United States and other countries weigh punitive actions following the disappearance of Saudi commentator Jamal Khashoggi.

High-profile tech, finance and media personalities have dropped out of the fund’s second annual conference, the Future Investment Initiative (FII), dubbed “Davos in the Desert.” Among them are executives at companies where the PIF has invested

The following are some of the foreign commitments – worth more than $100 billion – the PIF has made since 2015, based on Reuters and other media reports, listed in chronological order. A spokesperson for the PIF declined to comment for this story.

* PIF acquired 38 percent of POSCO, a South Korean steelmaker, in February 2015, in a deal worth $1.36 billion.

* PIF signed an agreement in July 2015 with the Russian Direct Investment Fund to jointly invest up to $10 billion, without specifying each party’s contribution or where the investments would be made. In 2017, Russia’s energy minister said the two had invested $1 billion in nine joint projects.

* In October 2015, PIF signed an agreement with France to invest $2 billion in French private funds focused on renewable energy and small and medium industries. A French statement said PIF was also in “final negotiations” to provide $3 billion to Coface, the French credit insurer, for export financing.

* In April 2016, PIF signed an agreement with Egypt to create a $16 billion investment fund, without elaborating on each party’s contribution.

* PIF acquired a five percent stake in Uber worth $3.5 billion in June 2016. It was the fund’s first major investment and widely seen as a signal of its new tech-focused strategy.

* PIF acquired a 10.1 percent stake in German shipping company Hapag-Lloyd worth $755.25 million in July 2016. The acquisition was the result of a merger of Hapag-Lloyd and United Arab Shipping Company (UASC), in which PIF already held a stake.

* PIF invested $500 million in November 2016 in Middle Eastern e-commerce venture, founded by Dubai billionaire Mohammed Alabbar.

* PIF planned to buy a 50 percent stake in Adeptio, the Gulf-based firm which controls Kuwait Food Co (Americana), in a deal worth $2 billion, Reutersreported in November 2016. No information was ever publicly disclosed about the deal.

* PIF pledged $45 billion to a technology-focused investment fund with Japan’s SoftBank Group in May 2017, creating the $100 billion SoftBank Vision Fund. This year, SoftBank’s chief executive said that a “Vison Fund 2” would be launched that could again count the PIF as an investor.

* PIF signed a memorandum of understanding with U.S. private equity firm Blackstone in May 2017, committing up to $20 billion to a $40 billion fund focused on U.S. infrastructure.

* PIF announced plans at last year’s FII in October 2017 to invest $1 billion in British billionaire Richard Branson‘s space company Virgin Galactic and sister companies The Spaceship Company and Virgin Orbit. On Thursday, Branson suspended his directorship in two Sauditourism projects and halted Virgin Group’s talks on the Saudi investment.

* PIF signed a memorandum of understanding (MOU) in December 2017 with U.S.-based movie exhibition company AMC Entertainment Holdings, which had plans to set up theaters in SaudiArabia. The value of the deal has not been made public.

* PIF invested $461 million in Magic Leap, a U.S.-based augmented reality startup, in March 2018.

* PIF signed an MOU with Endeavor, one of Hollywood’s biggest talent and event managers, in March to take a $400 million stake, Bloomberg and Wall Street Journal reported. On October 15, the Hollywood Reporter reported that Endeavor was pulling out of its deal with the kingdom in the wake of Kashoggi’s disappearance.

* PIF announced an agreement with U.S. amusement park operator Six Flags in April to open a theme park in Qiddiya entertainment city in Saudi Arabia by 2022. No financial details were disclosed.

* PIF partnered with other investors in May to acquire a 57.8 percent stake in AccorInvest, a French hotel real estate firm, for $5.33 billion. PIF’s stake size was not disclosed.

* PIF built up an undisclosed stake of just below 5 percent in electric car maker Tesla, Reuters reported in August. The fund has not commented publicly on comments by Tesla CEO Elon Musk that the fund had expressed support for a prospective deal to take the company private.

* PIF agreed in September to invest more than $1 billion in American electric carmaker Lucid Motors. (Compiled by Nafisa Eltahir and Tuqa Khalid, Editing by Katie Paul and Jane Merriman)

This article was first published in Zawya

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