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


Jeddah Season provides seasonal employment for young Saudis

Updated 8 min 51 sec ago
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Jeddah Season provides seasonal employment for young Saudis

JEDDAH: The Jeddah Season festival has provided a wide range of seasonal employment opportunities for young Saudi men and women, helping them gain experience and prepare them to enter the job market.

More than 5,000 young Saudis are working around the clock, each in his or her field, to manage the festival’s activities.

The festival aims to highlight development opportunities in Saudi Arabia, introduce the Kingdom as one of the most popular tourist destinations in the world, support the government’s efforts to empower Saudi youths, support local small and medium enterprises, develop Jeddah’s tourism sector and provide volunteer opportunities.

Jeddah Season, which began on June 8 and runs until July 18, has attracted thousands of visitors of all ages through its 150 local and international events and activities.

It is being held at five sites: King Abdullah Sports City, Al-Hamra Corniche, the Jeddah Waterfront, Obhur and Historic Jeddah (Al-Balad), which is a UNESCO World Heritage Site.

Jeddah Season offers a wide range of tourism, entertainment and cultural events and activities, and sheds light on the city’s status as the Kingdom’s tourism capital. Most of its events are being held for the first time in Saudi Arabia.

Jeddah Season is in line with the Vision 2030 reform plan, which aims to advance the welfare of Saudi society, diversify local development opportunities, improve the Kingdom’s contribution to arts and culture, and create job opportunities for Saudi youths.