Meet the world’s most flirtatious sovereign-wealth fund
Your columnist was in Riyadh in 2016 when Muhammad bin Salman, wearing robes and sandals, announced his Vision 2030, aimed at ending what the crown prince described as the kingdom’s addiction to oil. Saudi Arabia’s de facto ruler talked of selling shares in Saudi Aramco, the world’s biggest oil company, to fund a giant sovereign-wealth fund (SWF), worth $2trn, to invest in diverse non-oil industries. He would be its chairman, benefactor and mastermind. It was heady stuff, even if some of it sounded unhinged in a hidebound autocracy like Saudi Arabia. The most striking thing occurred later when a palace official invited Schumpeter to a café. Young men and women sat without head coverings, flirting openly. The rule-breaking atmosphere was electric.
Today, the Saudi SWF, called the Public Investment Fund (PIF), is becoming the goliath Prince Muhammad dreamed about. The value of its assets has ballooned to $700bn, it has over 1,400 employees and a rising global profile, and, like those youthful café-dwellers, it has discovered the joys of public flirtation. Whether revolutionising golf, buying Europe’s football glitterati, betting on star video-gaming companies, building an airline from scratch or turning Aston Martin electric, the pif cannot stop orchestrating one headline-grabbing deal after another. It has come “screaming onto the scene” with an “everything, everywhere, all-at-once investment approach”, says Robert Mogielnicki of the Arab Gulf States Institute, a think-tank based in Washington, DC. Yet it may not be as promiscuous as it sounds. Look carefully and there is more than adolescent impetuousness to its investment approach.
It starts with the PIF’s mandate. Like many SWFs, one aim is to redirect the country’s oil wealth into global assets for long-term growth. But it is also required to nurture a diversified economy at home in case demand for oil drops. It has aggressive…
2023-06-29 09:38:41
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