Public Investment Fund
![]() | |
Founded | 17 August 1971 |
---|---|
Founder | Faisal bin Abdulaziz |
Headquarters | , |
Key people | Mohammed bin Salman (Chairman) Yasir Al-Rumayyan (Governor) |
AUM | $620 billion (£492 billion)[1] |
Website | www.pif.gov.sa |
The Public Investment Fund (PIF; Arabic: صندوق الإستثمارات العامة) is the sovereign wealth fund of Saudi Arabia. It is among the largest sovereign wealth funds in the world with total estimated assets of $620 billion (£492 billion).[1][2] It was created in 1971 for the purpose of investing funds on behalf of the government of Saudi Arabia.[3] The wealth fund has been controlled by Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler since 2015.[1][4]
![](http://upload.wikimedia.org/wikipedia/commons/thumb/3/3e/Yasir_bin_Othman_Al-Rumayyan.jpg/220px-Yasir_bin_Othman_Al-Rumayyan.jpg)
It has been characterized as among the least transparent sovereign wealth funds in the world. In 2016, the Wall Street Journal noted that none of the fund's investments were named.[3] The organization's activities have stirred controversy due to its relationship with the Saudi Arabian government and its human rights record.[5] The fund's domestic investments tend to go to firms owned by elites with long-standing personal connections to the Saudi state.[6] Some of PIF's assets were transferred to the organization in 2017 after the Saudi regime conducted an "anti-corruption" purge whereby assets of 400 of Saudi Arabia's richest individuals were seized by the regime.[7]
In 2021, PIF led a consortium that purchased Premier League club Newcastle United. The takeover sparked condemnation by human rights organizations. The other 19 Premier League clubs condemned the Saudi takeover of Newcastle, stating that it damaged the brand of the Premier League.[8]
The present governor of PIF is Yasir Al-Rumayyan, serving under Mohammed bin Salman.
History
The Saudi Arabian Public Investment Fund (PIF) was established by the King Faisal bin Abdulaziz Al Saud in 1971[9] by Royal Decree M/24[10] with the stated intent to provide financing support for projects of strategic significance to the national economy.[11] For much of its history, the PIF was a passive entity that oversaw the Saudi state's equity in listed firms.[9] When neighboring petrostates began using their sovereign wealth funds for influence, Saudi Arabia followed them.[9] The PIF expanded its staff from 50 in 2015 to nearly 500 in 2018.[9]
In July 2014, the Council of Ministers granted the PIF authority to fund new companies inside and outside the Kingdom, either independently or in cooperation with the public and private sectors, without the council's prior approval.[12] In March 2015, oversight of PIF was moved from the Ministry of Finance to the Council of Economic and Development Affairs (CEDA). As part of this process, a new PIF was appointed, chaired by Crown Prince Mohammed bin Salman.[13] The board says PIF is aligned with the government's Vision 2030[14] with the aim to diversify the economy.[15] To bolster the resources of the PIF and help in the financing of investments into foreign companies such as Uber and Tesla, the PIF received cash from the Saudi central bank, issued debt, and benefitted from the proceeds of the privatisation of Saudi state assets.[9]
PIF has been characterized as among the least transparent sovereign wealth funds in the world. In 2016, The Wall Street Journal noted that none of the fund's investments were named.[3] According to Steffen Hertog, a professor at the London School of Economics, the PIF "is seen as opaque, a black box. Few know what’s going on there, including sometimes other government ministries."[9] As the PIF is a ministry-operated company with an overwhelming focus on domestic investments, some scholars characterize it as a "quasi-sovereign wealth fund."[16][17][18]
In the wake of a 2017 "anti-corruption" purge in Saudi Arabia, PIF obtained numerous assets that the Saudi regime had seized from rich Saudi individuals.[7]
A 2021 report by Global SWF found that PIF's Governance, Sustainability and Resilience (GSR) score had risen by 12% to an overall score of 40% (out of 100%) that year. This was partially attributed to the fact that PIF had started to build a dedicated ESG (Environmental, Social and Sustainability) team.[19]
Saudi PIF bought the Newcastle United football team in 2021.
Investment projects
The PIF has 38% stake in Posco Engineering & Construction Co., a 5% stake in Uber (for $3.5 billion), and a 5% stake in the video game companies Capcom and Nexon (for $1 billion).[20] In March 2016, it was announced that ownership of Saudi Aramco would be transferred to the PIF and that the Kingdom will seek to list 5 percent of Aramco's shares by 2017.[21] PIF owns Qiddiya,[22] spearheads the Red Sea project for luxury beach resorts,[23][24] and owns the closed joint-stock company named NEOM.[25][26] PIF owns a 5.7% stake (valued at $500 million) in concert distributor Live Nation.[27] In 2020, PIF purchased minority stakes in major U.S. companies including Boeing, Facebook and Citigroup.[28] PIF disclosed a $713.7 million stake in Boeing, around $522 million in Citigroup, a $522 million stake in Facebook, a $495.8 million stake in Disney and a $487.6 million stake in Bank of America. It also disclosed a small stake in Berkshire Hathaway.[29] PIF also disclosed an $827.7 million stake in oil company BP.[30] In 2020, PIF purchased a 2.32% stake (valued at $1.5 billion) in India's Jio Platforms,[31][32] and reduced its holdings in US stocks to $7 billion from $10.1 billion in the third quarter. It instead left a stake of $2.7 billion in Uber.[33]
In 2016, SoftBank Group and the PIF announced that they would establish a SoftBank Vision Fund which aims to invest up to $45 billion over five years in the tech sector.[34] The SoftBank Group confirmed that during the fiscal year 2019–2020, the Vision Fund, in which Saudi Arabia invested $45 billion, incurred a loss calculated at $17.7 billion, after the value of investments was written down. The losses were related to the investments in WeWork and Uber Technologies Inc. In 39-year history of SoftBank, the Saudi Arabia-backed funds paid the group its worst ever losses, where the overall company losses were 1.36 trillion yen (more than $12.5 billion).[35]
During the 2017 the Saudi-US CEO Forum, which was part of President Donald Trump's official trip to Saudi Arabia, PIF announced plans to "invest $40 billion in infrastructure projects, mostly in the U.S." Blackstone, whose CEO and founder—Stephen A. Schwarzman—is a top supporter of Trump, entered into a non-binding memorandum by which the PIF committed $20 billion to the project.[36] During the CEO Forum US-Saudi, arms deals were announced including a pledge to "assemble 150 Lockheed Martin Black Hawk helicopters" in Saudi Arabia, representing 450 jobs in Saudi Arabia" as part of the "$6 billion deal for Black Hawks."[37]
In March 2019, it was revealed that PIF paid a New York communications firm, Karv Communications, $120,000-a-month in order to repair Saudis' damaged reputation after the Assassination of Jamal Khashoggi.[38]
In 2021, they purchased stakes in the American video game companies Electronic Arts, Take-Two Interactive and Activision Blizzard. In May 2022, they purchased a 5% stake in the Japanese video game company Nintendo,[39] and the following month, an 8% stake in Embracer Group with a $1 billion investment.[40]
PIF owns a major indirect stake in Twitter, although many Saudis who use the platform for political dissent and activism are arbitrarily arrested and imprisoned.[41]
Former Donald Trump administration officials
In 2021, PIF invested $2 billion into a private equity firm that had been newly formed by Jared Kushner, Donald Trump's son-in-law, shortly after he left the White House. PIF advisers raised questions about the merits of the investment, but PIF management overruled the advisers.[1] By April 2022, Kushner's equity firm primarily depended on Saudi money, as it only had $2.5 billion under its management.[1] Within the Donald Trump administration, Kushner was a staunch defender of Saudi ruler Mohammed bin Salman.[1] According to ethics experts, the investment created the appearance of potential payback for Kushner.[1] In May 2022, it was revealed that Affinity Partners was planning to direct Saudi Arabia’s PIF money to Israel. There were multiple meetings by Kushner with a range of Israeli startups, before he picked two of them to make an investment. The Kingdom didn’t have diplomatic relations with Israel and was neither a part of the Abraham Accords. Saudi Arabia was warned by Kushner that it could lose the opportunities in Israel to its neighbors who signed the accords, including the UAE and Bahrain. Through Kushner’s firm, Saudi could open to Israeli businesses, which could prove to be lucrative for the Arab country. Affinity Partner’s investment in Israeli startups was agreed to by Saudi officials, and was also believed to have been approved by Crown Prince Mohammed. Many saw it as a groundwork for a potential normalization of relations between Saudi and Israel.[42] This will be the first known time that money from the Saudi’s sovereign wealth fund will go to Israel.[42]
In 2021, PIF invested $1 billion in the investment fund established by former Donald Trump administration official Steven Mnuchin just after he left government.[1][43]
Takeover of Newcastle United
On 14 April 2020, it emerged that a deal to transfer ownership of Newcastle United F.C. for £300m had been agreed between incumbent owner Mike Ashley and a prospective buying consortium consisting of the Public Investment Fund, PCP Capital Partners and Reuben Brothers.[44] However, the Premier League controversially refused to ratify the deal and so Mike Ashley subsequently engaged in various legal proceedings against the Premier League in an attempt to complete the takeover.[45][46] On 7 October 2021, it was announced that the club would be acquired by the consortium led by the Public Investment Fund,[47] after the Premier League stated it had received "legally binding assurances that the Kingdom of Saudi Arabia will not control Newcastle United Football Club".[48]
Human rights organizations criticized the Premier League for allowing PIF to purchase a Premier League club. Amnesty International pointed to Saudi Arabia's human rights record, and said that the Premier League must introduce standards whereby human rights violators cannot own Premier League clubs.[49][50] Amnesty called the takeover "an extremely bitter blow for human rights defenders."[51] Hatice Cengiz, the fiancée of Saudi journalist Jamal Khashoggi, who was murdered by operatives of the Saudi regime, urged the Premier League to block PIF's takeover.[50]
In April 2021, Saudi crown prince Mohammed bin Salman reportedly asked British Prime Minister Boris Johnson to intervene so that the Premier League would approved PIF's takeover of Newcastle. The attempted takeover was "a blatant example of Saudi sportswashing", according to Kate Allen of Amnesty International UK.[52] The British government blocked details of its talks with the Premier League regarding the Saudi takeover, saying the disclosure could "harm" relations with Saudi Arabia.[51] The other 19 Premier League clubs condemned the takeover, saying it damaged the Premier League's brand.[8]
Establishment of LIV Golf
In October 2021, a division of the PIF, Golf Saudi funded the establishment of the LIV Golf Investments, with Greg Norman declared to be its CEO. The private company introduced a professional tour, LIV Golf, also referred to as the Super Golf League. It came as a new challenge against the PGA Tour, after the World Golf Tour and the Premier Golf League.[53] [54] [55] [56]
LIV Golf strategy differed from other leagues as it offered the richest golf tournaments in history and was able to convince star players to take part.[57] In June 2022, LIV Golf Invitational Series commenced its eight-event journey, with a total prize money of $255 million. Saudi PIF backed the event with $2 billion funds. Besides, LIV Golf offered the winner’s prize money of $4 million, in comparison to PGA Championship’s $2.7 million.[58] Some of the prominent professional golf players participated in the event, including Phil Mickelson, Dustin Johnson, Graeme McDowell, Sergio García, Martin Kaymer, Louis Oosthuizen, Charl Schwartzel and Lee Westwood.[59] Dustin Johnson was allegedly paid $150 million to join the Saudi-backed series.[60] Phil Mickelson also committed to the series after signing a $200 million contract.[61] However, some other renowned players also rejected the new league. Tiger Woods turned down an offer worth nearly $1 billion.[62] A vocal critic of the tournament, Rory McIlroy also stood with PGA Tour and criticized players who joined LIV, stating they were “taking the easy way out”.[63]
LIV Golf was also condemned as another sportswashing tool of Saudi Arabia, which is accused of several human rights violations, including the assassination of Jamal Khashoggi.[64] The CEO Greg Norman and star players had to face questions about their association with LIV Golf, despite the Kingdom’s abysmal human rights records. Norman dismissed the questions saying, “We’ve all made mistakes” and that Saudi wanted “to move forward”.[65]
Phil Mickelson also gave a controversial statement saying, the Saudis are "scary motherf–kers to be involved with". He said, “We know they killed Khashoggi and have a horrible record on human rights”. Despite that, Mickelson joined the LIV Golf calling it “a once-in-a-lifetime opportunity” to reshape PGA Tour.[66] Graeme McDowell also gave similar answers and said, “We're not politicians, we're professional golfers. If Saudi Arabia wants to use the game of golf as a way for them to get to where they want to be, I think we're proud to help them on that journey.”[67]
See also
References
- ^ a b c d e f g h Kirkpatrick, David D.; Kelly, Kate (10 April 2022). "Before Giving Billions to Jared Kushner, Saudi Investment Fund Had Big Doubts". The New York Times. ISSN 0362-4331. Retrieved 10 April 2022.
- ^ "Public Investment Fund (PIF) - Sovereign Wealth Fund, Saudi Arabia - SWFI". www.swfinstitute.org. Retrieved 10 January 2021.
- ^ a b c Clark, Simon (1 November 2016). "Saudi Wealth Fund May Be World's Least Transparent". Wall Street Journal. ISSN 0099-9660. Retrieved 18 July 2021.
- ^ Montambault Trudelle, Alexis (2022). "The Public Investment Fund and Salman's state: the political drivers of sovereign wealth management in Saudi Arabia". Review of International Political Economy: 1–25. doi:10.1080/09692290.2022.2069143. ISSN 0969-2290. S2CID 248596678.
- ^ "Newcastle United sold to Saudi consortium amid concerns about human rights abuses". Washington Post. ISSN 0190-8286. Retrieved 8 October 2021.
- ^ Montambault Trudelle, Alexis (2022). "Towards a sociology of state investment funds? sovereign wealth funds and state-business relations in Saudi Arabia". New Political Economy: 1–18. doi:10.1080/13563467.2022.2126448. ISSN 1356-3467. S2CID 252424148.
- ^ a b "Revealed: Newcastle chairman's links to Saudi 'anti-corruption' drive". The Guardian. 16 October 2021. Retrieved 17 October 2021.
- ^ a b "Angry Premier League clubs demand emergency meeting on Newcastle deal". The Guardian. 8 October 2021. Retrieved 8 October 2021.
- ^ a b c d e f "Saudi sovereign wealth fund scrambles for resources". www.ft.com. 2018. Retrieved 8 September 2021.
{{cite web}}
: CS1 maint: url-status (link) - ^ "موقع هيئة الخبراء بمجلس الوزراء". Archived from the original on 26 February 2017. Retrieved 2 December 2016.
- ^ Bloomberg - The Key Questions Asked About Saudi Arabia’s $2 Trillion Fund
- ^ "Saudis refine blueprint for post-oil economy". al-monitor.com. 26 April 2016. Retrieved 2 December 2016.
- ^ "Cabinet Session 23-3-2015 - kingdom of Saudi Arabia - Ministry of Foreign Affairs". Retrieved 2 December 2016.
- ^ "Financial Times - The Saudi Reshuffle: five key reforms in Riyadh, May 2016". June 2016.
- ^ "Al Arabiya – full text of Vision 2030". June 2016.
- ^ Cumming, Douglas; Wood, Geoffrey; Filatotchev, Igor; Reinecke, Juliane, eds. (2017). The Oxford Handbook of Sovereign Wealth Funds. Vol. 1. Oxford University Press. pp. 7, 9. doi:10.1093/oxfordhb/9780198754800.001.0001. ISBN 978-0-19-875480-0.
- ^ "A Comparative Study of Sovereign Investor Models: Sovereign Fund Profiles". projects.iq.harvard.edu. p. 93. Retrieved 8 September 2021.
{{cite web}}
: CS1 maint: url-status (link) - ^ Das, Mr Udaibir S.; Mazarei, Mr Adnan; Hoorn, Han van der (2010). Economics of Sovereign Wealth Funds. International Monetary Fund. p. 257. ISBN 978-1-58906-927-5.
- ^ "Biggest Gulf Wealth Funds Are Faulted for Lagging on Governance". Bloomberg.com. Bloomberg. 4 July 2021. Retrieved 4 October 2021.
- ^ "Saudi acquires 5% stake in Capcom and Nexon gaming firms worth $1bn". Middle East Monitor. 6 February 2022. Retrieved 7 February 2022.
- ^ Dobson, Paul Warner (2 October 2016). "Saudi Arabia's Vision 2030". Headline Hamster. Retrieved 22 October 2016.
- ^ "Qiddiya Investment Company officially established as standalone company". Arab News. 21 May 2018. Retrieved 5 May 2019.
- ^ His Royal Highness the Crown Prince Announces the Launch of ‘The Red Sea’ project as an international tourist destination as part of the Kingdom’s 2030 Vision, Pif.gov.sa, 31 July 2017
- ^ Rob Hodgetts, Saudi Arabia launches luxury Red Sea beach resorts plan, Cnn.com, 3 August 2017
- ^ "UPDATE 1-Saudi NEOM set up as joint stock company run by state fund..." Reuters. 29 January 2019. Retrieved 29 January 2019.
- ^ "Saudi Arabia announces creation of Neom Company". Arab News. 29 January 2019. Retrieved 29 January 2019.
- ^ "Saudi fund acquires $500m stake in Live Nation – as the company balances 'doing the right thing' with its $3.8bn cash pot". 27 April 2020.
- ^ "Saudi sovereign fund discloses stakes in Citi, Boeing, Facebook". Cnbc. 16 May 2020. Retrieved 17 May 2020.
- ^ "Saudi Sovereign Wealth Fund Buys Stakes in Facebook, Boeing, Cisco Systems". The Wall Street Journal. 16 May 2020. Retrieved 17 May 2020.
- ^ "Saudi Arabia's Public Investment Fund invests billions of dollars in Boeing, Disney and Facebook shares". The National. 16 May 2020. Retrieved 17 May 2020.
- ^ "Jio-PIF deal: All you need to know about Saudi Arabia's PIF, the latest investor in Jio Platforms". Money Control. Retrieved 18 June 2020.
- ^ "Reliance Industries' Jio Platforms Has Raised INR 1.16 Lakh Crore Within 9 Weeks Through These 11 Deals". NDTV Profit. Retrieved 18 June 2020.
- ^ "Saudi Wealth Fund Cuts U.S. Stock Holdings, Holds On to Uber". BNN Bloomberg. 17 November 2020. Retrieved 17 November 2020.
- ^ "SoftBank Group Corp. to Establish SoftBank Vision Fund" (Press release). SoftBank Group. 14 October 2016. Retrieved 22 October 2016.
- ^ "SoftBank Vision Fund Posts $17.7 Billion Loss on WeWork, Uber". Bloomberg.com. 18 May 2020. Retrieved 18 May 2020.
- ^ Manchester, Julia (20 May 2017). "Blackstone, Saudis set to invest $40 billion in primarily U.S. infrastructure". The Hill. Retrieved 20 May 2017.
- ^ "Saudi-US arms deal includes plans for 150 Lockheed Martin Black Hawk helicopters". Arab News. Riyadh, Saudi Arabia. 20 May 2017. Retrieved 20 May 2017.
- ^ Saudi Arabia fund hires PR firm in the wake of Khashoggi murder, Andrew England, 19 March 2019, Financial Times
- ^ Plunkett, Luke (18 May 2022). "Saudi Arabia Now Owns 5% Of Nintendo". Kotaku. Retrieved 18 May 2022.
- ^ Partis, Danielle (8 June 2022). "Saudi Arabia acquires $1bn stake in Embracer Group". Gamesindustry.biz. Retrieved 8 June 2022.
- ^ "Saudi woman given 34-year prison sentence for using Twitter". the Guardian. 16 August 2022. Retrieved 17 August 2022.
- ^ a b "Jared Kushner's New Fund Plans to Invest Saudi Money in Israel". The Wall Street Journal. 7 May 2022. Retrieved 8 May 2022.
- ^ Rappeport, Alan (20 September 2021). "Mnuchin's Private Equity Fund Raises $2.5 Billion". The New York Times. ISSN 0362-4331. Retrieved 27 November 2021.
- ^ "Newcastle United takeover deal worth £300m close". BBC Sport. Retrieved 14 August 2020.
- ^ "Newcastle hire lawyers in dispute with Premier League over failed Saudi-led takeover". Sky Sports. Retrieved 21 September 2020.
- ^ "Newcastle take Premier League to competition tribunal over takeover collapse". BT Sport. Retrieved 8 August 2021.
- ^ "PIF, PCP Capital Partners and RB Sports & Media acquire Newcastle United Football Club". Newcastle United. Retrieved 7 October 2020.
- ^ "Newcastle takeover completed: Saudi-led consortium end Mike Ashley's 14-year ownership". Sky Sports. Retrieved 7 October 2021.
- ^ Harpur, Charlotte. "PL told to analyse human rights record for new owners by Amnesty International". The Athletic. Retrieved 7 October 2021.
- ^ a b "Amnesty voices human rights concerns as Saudi takeover of Newcastle looms". Reuters. 7 October 2021. Retrieved 7 October 2021.
- ^ a b "Newcastle United: UK blocks details of Premier League talks to protect Saudi relations". BBC News. 8 October 2021. Retrieved 8 October 2021.
- ^ "Saudi crown prince asked Boris Johnson to intervene in Newcastle United bid". The Guardian. 15 April 2021. Retrieved 8 October 2021.
- ^ "Greg Norman named CEO of Saudi group launching 10-event series on Asian Tour. Here's what we know and don't know". Golf Digest. Retrieved 29 October 2021.
- ^ "Saudi golf group set to unveil new series with Greg Norman as commissioner". Golf Week. 27 October 2021. Retrieved 27 October 2021.
- ^ "What is driving the Super Golf League?". Yahoo Sport. Retrieved 3 February 2022.
- ^ "The LIV Golf series: What we know, what we don't, and the massive ramifications of the Saudi-backed league". Golf Digest. Retrieved 8 June 2022.
- ^ "What Is LIV Golf? It Depends Whom You Ask". The New York Times. Retrieved 10 June 2022.
- ^ "When It Comes To Prize Money, LIV Golf's Debut In London Blows Away The PGA Tour". Forbes. Retrieved 9 June 2022.
- ^ "LIV Golf: Dustin Johnson, Sergio Garcia, Lee Westwood and Ian Poulter to play in first event". BBC Sport. Retrieved 1 June 2022.
- ^ Corrigan, James; Morgan, Tom (June 2022). "Dustin Johnson paid £100m to perform late U-turn and join Saudi-backed rebel series". The Telegraph. Retrieved 1 June 2022.
- ^ "Phil Mickelson Signs LIV Golf Contract Reportedly Worth Approximately $200M". Bleacher Report. Retrieved 6 June 2022.
- ^ "Tiger Woods Officially A Billionaire, No Thanks To The Saudis". Forbes. Retrieved 10 June 2022.
- ^ "Rory McIlroy Says Players Leaving for LIV Golf Are 'Taking the Easy Way Out'". Bleacher Report. Retrieved 14 June 2022.
- ^ "Saudi-backed LIV Golf tournament accused of 'sportswashing'". ABC News. Retrieved 14 June 2022.
- ^ "Greg Norman says 'we all make mistakes' when asked about Khashoggi killing". The Guardian. 12 May 2022. Retrieved 12 May 2022.
- ^ "Saudi Arabia's $2bn swing at golf shakes up global game". The Financial Times. 11 June 2022. Retrieved 11 June 2022.
- ^ "'We're not politicians', says Graeme McDowell, as LIV golfers asked about Saudi Arabia's human rights". Sky Sports. Retrieved 8 June 2022.
External links
- Official website
- Public Profile PIF from SWFI