Saudi wealth fund continues its drive to become $2trn powerhouse

Tesla marks the latest high-profile investment for Saudi Arabia's Public Investment Fund
Saudi wealth fund continues its drive to become $2trn powerhouse
By Bloomberg
Thu 09 Aug 2018 12:07 PM

Saudi Arabia’s purchase of a stake of about $2 billion in Tesla is only the latest high-profile investment by its sovereign wealth fund since 2016.

The Public Investment Fund built up a less-than 5 percent stake in the electric carmaker in recent months, according to a person familiar with the matter, just as Elon Musk considers taking the company private.

Saudi invests $2bn in Tesla as founder Elon Musk mulls taking it private

At $420 a share, Tesla would have an enterprise value of about $82 billion including debt

PIF’s move comes as it seeks to turn into a $2 trillion powerhouse and help diversify Saudi Arabia’s oil-dependent economy. Here’s a selection of PIF’s recent investments and holdings:

Uber Technologies

PIF invested $3.5 billion in US ride-share company Uber Technologies Inc. in June 2016. PIF Managing Director Yasir Al-Rumayyan took a board seat at the San Francisco-based company after the deal, which valued Uber at $62.5 billion. At the time it was the biggest infusion of cash into Uber from a single investor.

Virgin Group

The fund announced plans in October 2017 to invest about $1 billion in Virgin Group’s space companies, Virgin Galactic, The Spaceship Co. and Virgin Orbit. PIF also holds an option to invest an additional $480 million in Virgin’s space services. Saudi Arabia plans to support the ventures’ plans for human spaceflight and launching satellites into orbit and may cooperate with Virgin to create a space-centric entertainment industry in the country.

Blackstone funds

PIF agreed to commit $20 billion in May 2017 to an infrastructure investment fund with Blackstone Group, the world’s biggest private-equity manager. Blackstone plans to raise the same amount from other investors and with leverage, the New York-based asset manager expects to have more than $100 billion in purchasing power for infrastructure projects, primarily in the US

SoftBank

Saudi Arabia and SoftBank Group Corp. announced the first close of an almost $100 billion technology fund, the largest ever, in May 2017 secured from backers led by PIF and the Japanese company. PIF didn’t disclose the size of its investment, but Crown Prince Mohammed bin Salman said he might invest up to $45 billion in the fund over five years. Apple Inc., Qualcomm Inc., Foxconn Technology Group and Sharp Corp. also put in capital.

Separately, PIF also owns stakes in some of Saudi Arabia’s biggest companies on behalf of the government:

Saudi Basic Industries Corp., owns 70%

Holds 70 percent of Saudi Basic Industries Corp., the world’s second-biggest chemicals maker by market value. It is now seeking to sell the 70 percent stake to oil company Saudi Aramco.

Saudi Telecom Co., owns 70%

Owns 70 percent of Saudi Telecom Co., the country’s biggest phone services provider. The company competes in the local market with a unit of U.A.E.’s Etisalat and Kuwait’s Zain.

National Commercial Bank, owns 44%

Holds 44.3 percent of National Commercial Bank, the country’s biggest lender.

Saudi Arabian Mining Co., owns 65%

Holds 65.4 percent of Saudi Arabian Mining Co, or Maaden, which has interests in low-grade bauxite, phosphate, aluminium and industrial minerals.

Samba Financial Group, owns 23%

Holds a 22.9 percent stake in Samba Financial Group, the country’s third-biggest bank. Citigroup Inc. sold its stake in Samba in 2004.

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