Saudi wealth fund aims to nearly double size by 2020

Participants watch a movie advertising a Red Sea project at the three-day Future Investment Initiative conference in Riyadh where the PIF pledged to create 20,000 domestic jobs. (AFP)
Updated 26 October 2017
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Saudi wealth fund aims to nearly double size by 2020

RIYADH: Saudi Arabia’s main sovereign wealth fund wants to increase its financial clout to SR 1.5 trillion ($400 billion) by 2020 as part of the Kingdom’s efforts to boost private-sector growth and wean itself off oil export dependence.
The assets-under-management goal, laid out by the Public Investment Fund (PIF) on Wednesday, came on the second day of an international conference in Riyadh. It was accompanied by publication of PIF’s first comprehensive business program, outlining targets for investments and returns for 2018-2020.
PIF, which is expected to receive proceeds from the planned sale of 5 percent of state oil company Saudi Aramco’s shares, has currently around $230 billion worth of assets under management. It plans to create 20,000 direct domestic jobs, and 256,000 construction jobs by 2020. This will increase PIF’s contribution to Saudi Arabia’s gross domestic product from 4.4 percent to 6.3 percent, it said in a statement on Wednesday.
Investments will be in sectors such as real estate and infrastructure as well as in new areas of activity in the Saudi economy through the establishment of companies such as the Saudi Arabian Military Industries company and the Saudi Real Estate Refinancing Company.
One of the biggest tasks facing PIF will be the delivery of a $500 billion plan to build a business and industrial zone extending into Jordan and Egypt, announced at the start of the conference on Tuesday.
PIF also set a new target to increase total shareholder return to 4 to 5 percent between now and 2020 from 3 percent, it said on Wednesday.
“The PIF Program represents a vital milestone as we work toward realizing Vision 2030,” Crown Prince Mohammed bin Salman, the economic reform plan’s architect, said in a statement.
The 96-page program said PIF will structure its investments in six areas: Saudi equity holdings, sector development, real estate and infrastructure, mega projects, international strategic investments and a “diversified pool” across global asset classes. It said “long-term” average annual return from these areas would be between 6.5 and 9 percent.
Outside of Saudi Arabia, PIF’s investments will be in a number of assets such as fixed-income, public equity, private equity and debt, real estate, infrastructure and alternative investments such as hedge funds, the fund said.
PIF Managing Director Yasir Al-Rumayyan said the fund was open to investing in more big ticket items such as US ride services company Uber.
It also outlined its four major sources of funding to include capital injections from the government, government asset transfers, loans and debt instruments as well as retained earnings from investments.
— Reuters


Saudi air force completes ‘Red Flag’ military exercise in US

Updated 6 min 58 sec ago
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Saudi air force completes ‘Red Flag’ military exercise in US

LONDON: The Royal Saudi Air Force concluded its “Red Flag” military exercise in the US on Saturday, which saw more than 800 sorties carried out by the unit.
The air force conducted a number of combat scenarios in a real combat environment in which Saudi pilots demonstrated their high combat capability and rapid ability to deal with enemy targets and destroy them.
The Commander of the air force participating in the exercise, Col. Masoud bin Nasser bin Shri said that participation in the exercise aimed to deepen the bonds of cooperation and exchange of experiences between the air forces of the participating countries, and increase the level of combat readiness and skill and develop of its officers.

Col. Bin Shri confirmed that the air and technical crews achieved outstanding success and high level of accuracy and professionalism, with all flights successful.
He added that these exercises would be of great benefit to the participants of the air crews, and technical and administrative crews to develop their skills and skills and gain self-confidence and good practice in real life battle situations.