Public Investment Fund of Saudi Arabia

The Public Investment Fund (PIF) is a sovereign wealth fund owned by Saudi Arabia, founded for the purpose of investing funds on behalf of the Government of the Saudi Arabia.

History

The Saudi Arabian Public Investment Fund (PIF) was established in 1971 by Royal Decree M/24[1] to provide financing support for projects of strategic significance to the national economy.[2]

Since its inception, the PIF has played an important role in the financing of vital projects in the Kingdom, including in the oil refining, fertilizer, petrochemical and electricity sectors. In July 2014, the Council of Ministers granted the PIF authority to fund new companies inside and outside the Kingdom, either independently or in cooperation with the public and private sectors, without the council's prior approval.[3]

In March 2015, oversight of PIF was moved from the Ministry of Finance to the Council of Economic and Development Affairs (CEDA). As part of this process, a new Board was appointed, chaired by HRH the Deputy Crown Prince Mohammad bin Salman Al Saud.[4]

Following these changes, the Board is taking steps to refine its investment capabilities and enable the fund to manage a broader portfolio of current and new assets,[5] ensuring that it is aligned with the government’s Vision 2030.[6] The aim is to diversify government resources and the economy and to help unlock strategic sectors.[7]

Portfolio

PIF has a diverse portfolio made up of approximately 200 investments, of which around 20 are listed on Tadawul, the Saudi Stock Exchange. Example investments include:

Recent News

Beginning in 2015 the PIF began making a number of high-profile investments, including acquiring an 38% stake in South Korea’s Posco Engineering & Construction Co. in July 2015[19] and establishing a sizable fund with French firms in October 2015. In June 2016, it was announced that the PIF was acquiring an approximate 5 percent stake in Uber for an investment of $3.5 billion, the largest ever single investment in the App-based ride sharing company. On 14 October 2016 Japan's SoftBank announced it had signed a memorandum of understanding with the PIF for the establishment of a London-based SoftBank Vision Fund which aims to invest up to $45 billion over five years in the tech sector.[20]

In March 2016, it was announced that ownership of Saudi Aramco would be transferred to the PIF and that the Kingdom will seek to list 5 percent of Aramco’s shares by 2017. The PIF expects to become the largest sovereign wealth fund in the world with assets of $2 trillion.[21]

See also

References

  1. ↑ "موقع هيئة الخبراء بمجلس الوزراء". Retrieved 2 December 2016.
  2. ↑ Bloomberg - The Key Questions Asked About Saudi Arabia’s $2 Trillion Fund
  3. ↑ "Saudis refine blueprint for post-oil economy". 26 April 2016. Retrieved 2 December 2016.
  4. ↑ "Cabinet Session 23-3-2015 - kingdom of Saudi Arabia - Ministry of Foreign Affairs". Retrieved 2 December 2016. horizontal tab character in |title= at position 28 (help)
  5. ↑ "Vision 2030 – How to achieve our vision". June 2016.
  6. ↑ "Financial Times - The Saudi Reshuffle: five key reforms in Riyadh, May 2016". June 2016.
  7. ↑ "Al Arabiya – full text of Vision 2030". June 2016.
  8. ↑ "Reuters – Saudi's National Commercial Bank to raise $6 bln in IPO,". Oct 2, 2014.
  9. ↑ "Tadawul:". June 2016.
  10. ↑ "Tadawul". June 2016.
  11. ↑ "Reuters – Saudi sovereign fund Sanabil buys 20 pct of Almana General Hospitals,". February 2016.
  12. ↑ "Tadawul". June 2016.
  13. ↑ "GIB Website". June 2016.
  14. ↑ "Ma'aden Website". June 2016.
  15. ↑ "Tadawul". June 2016.
  16. ↑ "Financial Times - Uber cranks up ride-hailing battle with $3.5bn Saudi investment,". June 2016.
  17. ↑ "Tadawul". June 2016.
  18. ↑ "LinkedIn". June 2016.
  19. ↑ ""Let's establish a joint venture", following a 20-minute explanation of the miracle of Incheon Songdo.". POSCO Engineering & Construction., Ltd. November 4, 2015. Retrieved October 22, 2016.
  20. ↑ "SoftBank Group Corp. to Establish SoftBank Vision Fund". SoftBank Group. October 14, 2016. Retrieved October 22, 2016.
  21. ↑ Dobson, Paul Warner (October 2, 2016). "Saudi Arabia's Vision 2030". Headline Hamster. Retrieved October 22, 2016.
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