Saudi PIF eyeing investment returns of up to 9%: MD

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is targeting annual returns of 8-9 percent by 2025-2030 across its different portfolios, managing director Yasir Al Rumayyan said in Riyadh on Tuesday.

The fund’s various portfolios include international partnerships, sector development in Saudi Arabia, real estate and infrastructure, megaprojects, and Saudi equities.

“We benchmarked ourselves. We went to all the endowments, we went to all the sovereign wealth funds, the long term investors,” Al Rumayyan said, when asked about the rate of returns the fund was targeting.

Current numbers vary between 3 and 9 percent, he added, speaking at the Future Investment Initiative organized by the PIF.

Saudi Arabia plans to expand its wealth fund, established in 1971, as part of a wave of economic reforms announced last year following the crash in oil prices.

The PIF has announced a series of major investments this year, including the establishment of a $40 billion fund with US private equity firm Blackstone.

PIF will commit $20 billion to the venture, Al Rumayyan said at the forum, adding that the fund will continue to invest in “conventional” sectors such as infrastructure, healthcare, and education.

“Sometimes you have to invest in the conventional economy,” he said. “I think the conventional investments will not go away.”

Last year, PIF agreed to invest as much as $45 billion in a $100 billion technology investment fund run by Japan’s SoftBank. The deal followed an investment of $3.5 billion in ride-hailing app Uber.

The Saudi sovereign fund is looking to achieve four main strategic goals: to grow and diversify revenue streams; localize technologies; establish new sectors in Saudi Arabia; and develop and bolster international partnerships, Al Rumayyan noted. 

“With our short term plans we’re going to have more than 20,000 jobs in 2020 and beyond it’s going to be more,” he said.

The Saudi fund announced the establishment of companies in various sectors this month, including religious tourism, waste management, recycling, and mortgage refinancing.

In addition, the PIF launched the Fund of Funds, which will invest in venture capital and private equity funds targeting small and medium enterprises (SMEs).

Commenting on the upcoming initial public offering (IPO) of Saudi Aramco, Al Rumayyan said the listing will proceed as scheduled in 2018.

“We are on track, 2018 is on target. There’s nothing I know about that can take us off track,” he said.

He dismissed reports that the 5 percent stake could be sold directly to China. 

Write to Jerusha Sequeira at jerusha.s@argaamnews.com

Reem Abdellatif contributed to this story