Saudi PIF to increase assets to SAR 1.5 trln by 2020

Saudi Arabia’s Public Investment Fund (PIF) on Wednesday announced a new program for the period from 2018-2020, which will see the sovereign fund boost its assets under management (AUM) to SAR 1.5 trillion (over $400 billion) by 2020.

The PIF Program, one of 12 Vision Realization Programs under Saudi Arabia’s Vision 2030, aims to create 20,000 direct domestic jobs, more than half of which are high-skilled roles.

The program will also create 256,000 construction jobs, increasing PIF’s contribution to real GDP from 4.4 percent to 6.3 percent, and increase the share of local content to SAR 50 billion (over $13 billion).

The new plan will raise the fund’s Total Shareholder Returns (TSR) from 3 percent to 4-5 percent.

“At home, the PIF Program will unlock value in the domestic portfolio and drive forward strategic and sustainable diversification by creating opportunities in a range of different industries,” said Saudi Arabia’s Crown Prince Mohammad bin Salman.

“Internationally, the Fund has begun to invest in some of the world’s most innovative companies and formed partnerships that will support long-term income diversification and ensure Saudi Arabia is at the forefront of emerging trends,” he added.

The PIF Program has four key objectives: growing and maximizing PIF assets; launching new sectors; localizing advanced technologies and knowledge; and building economic partnerships.

The sovereign fund aims to help develop Saudi Arabia’s private sector through new domestic investment pools, namely Saudi holdings, Saudi sector development, real estate & infrastructure development, and mega-projects.

Meanwhile, PIF’s global investment strategy will target investment in fixed-income, private equity, debt, real estate, infrastructure and other alternative investments, mainly hedge funds.

The PIF has made many key announcements in the past month, including the establishment of companies in various sectors such as religious tourism, energy efficiency, recycling, and mortgage refinancing.

PIF has also set up in recent months the Saudi Arabian Military Industries company (SAMI) and the Fund of Funds targeted at small and medium enterprises (SMEs).

Internationally, the fund is a major backer of SoftBank’s $100 billion Vision Fund launched last year to invest in technology. The fund raised over $93 billion from backers in May this year.