“You don’t want to waste a crisis . . . So for us, definitely we are looking into any opportunities.”
That was the message delivered by Yasir al-Rumayyan, governor of Saudi Arabia’s sovereign wealth fund, as more than 2,000 bankers and executives tuned in to a virtual conference in April. And they were not idle words.
The $325bn Public Investment Fund has not been shy about its ambitions since it fell under Crown Prince Mohammed bin Salman’s stewardship five years ago — it boasts of becoming the world’s “most impactful investor” and the largest sovereign wealth fund. As the coronavirus pandemic wreaks economic carnage across the globe, PIF has stepped up a gear to become the most publicly active sovereign investment vehicle, unabashedly seeking out bargains amid the panic.
Three days after the conference, US regulatory filings revealed the fund had made one of its biggest bets on a company battered by the global crisis. It has snapped up a 5.7 per cent stake worth around $500m in Live Nation, a US-based entertainment company. Three weeks earlier, it had pounced when the shipping industry was sinking to build what is now a 7.3 per cent holding in Carnival, making it the second-largest shareholder in the world’s biggest cruise line operator.
It has also invested in about 20 US and European blue-chip companies, such as BP, Royal Dutch Shell, Total, Boeing, Citigroup, Disney and Facebook, acquiring smaller stakes worth at least $7.7bn in the first three months of the year. And those were just the investments made public. Separately, it led an investor group that agreed to buy Newcastle United, the English football club, for £300m.
“They are very engaged with investors. They see lots of opportunities, a lot of capital needs that will give them access to businesses,” says a senior London-based banker. “Hasty or good timing? We won’t know for another three years.”
PIF says it is “identifying opportunities to invest in solid companies with strong, long-term outlooks who we expect will be sector leaders when global economic activity begins to approach pre-pandemic levels”.
But this flurry of activity has brought increased scrutiny for a neophyte global investor, which is at the forefront of Prince Mohammed’s bold plans to modernise Saudi Arabia and reduce the kingdom’s dependency on oil. PIF has been a source of contention for several years. Its association with the crown prince meant it was tainted by the murder of journalist Jamal Khashoggi by Saudi agents in 2018. And it entered the crisis with a mixed investment record.
Critics fear it has become the personal tool of Prince Mohammed, a state-within-a-state that threatens to crowd out the private sector at home — where it is pursuing multibillion-dollar projects that risk becoming white elephants — even as it makes huge bets overseas. Its advocates argue that its role is vital for incubating and developing new industries to spur the…
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