May 8, 2021


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MBS: a Saudi sovereign fund doubling its assets in five years to $ 1.07T | News from banks

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The five-year plan would see the fund create 1.8 million direct and indirect jobs, Prince Mohammed bin Salman said.

Saudi Arabia’s Public Investment Fund (PIF) plans to double its assets to 4 trillion riyals ($ 1.07 trillion) by 2025, Prince Mohammed bin Salman said on Sunday, a move that would make it one of the largest sovereign wealth funds in the world.

The fund would invest 3 trillion riyals ($ 800 billion) in new sectors over the next 10 years, said the prince, who is the de facto ruler of Saudi Arabia and chairs the fund’s board of directors.

A new five-year plan would make the fund “the main catalyst for Saudi Arabia’s economic transformation and diversification,” the prince added in a speech on state television.

The prince has long made the PIF a central part of his plan to find ways to spur growth while weaning the economy off its dependence on oil. Crude exports still represent more than half of the kingdom’s income.

Sunday’s announcements highlighted “the fact that developments in Saudi Arabia are going to be led by the PIF. But external funding will remain essential given the size of its target, ”said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

The influx of foreign investment into the kingdom has been affected by the murder of Saudi journalist Jamal Khashoggi in 2018, followed by falling oil prices and the negative impact of COVID-19.

The prince said the fund, which had already increased its assets under management to 1.5 trillion riyals ($ 400 billion) by 2020 from $ 150 billion in 2015, was on track to meet its target of ‘have over 7.5 trillion riyals ($ 2.0 trillion) in assets. under management by 2030.

The five-year strategy would see the fund create 1.8 million direct and indirect jobs by 2025, up from 331,000 by the end of the third quarter of 2020, he said. To boost the national economy, the fund planned to inject at least 150 billion riyals ($ 40 million) per year into the local economy until 2025, added Prince Mohammed, also known as MBS. .

The PIF and its companies aimed to contribute 1.2 trillion riyals ($ 319 billion) to non-oil gross domestic product by the end of 2025, he added.

“The role of the Fund as a separate channel to support the economy at a time of volatile oil prices is of major importance. It will help create savings, secure funding and attract investment, ”said Mazen al-Sudairi, head of research at Al Rajhi Capital.

The fund has become a more active investor since 2015, taking a $ 3.5 billion stake in Uber Technologies and contributing $ 45 billion to SoftBank’s first $ 100 billion tech fund.

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