Saudi wealth fund buys stakes in major US firms


  • Investment
  • Monday, 18 May 2020

The PIF disclosed stakes worth US$713.7mil in Boeing, about US$522mil in Citigroup, US$522mil in Facebook, US$495.8mil in Disney and US$487.6mil in Bank of America, the US Securities and Exchange Commission (SEC) filing showed last Friday.

DUBAI: Saudi Arabia’s sovereign wealth fund has bought minority stakes in major American companies including Boeing, Facebook and Citigroup, a regulatory filing showed, giving it a portfolio of nearly US$10bil in US-listed stocks.

The US$300bil Public Investment Fund (PIF) has been buying minority stakes in companies across the world, taking advantage of market weakness in the wake of the coronavirus outbreak.

The PIF disclosed stakes worth US$713.7mil in Boeing, about US$522mil in Citigroup, US$522mil in Facebook, US$495.8mil in Disney and US$487.6mil in Bank of America, the US Securities and Exchange Commission (SEC) filing showed last Friday.

The PIF has a nearly US$514mil stake in Marriott and a small holding in Berkshire Hathaway, according to the filing. The PIF also disclosed an US$827.7mil stake in oil company BP, which has American Depository Receipts (ADRs) listed in the United States.

“The Saudi sovereign fund went shopping in Q1, ” tweeted Ali Al-Salim, co-founder of Dubai-based consulting firm Arkan Partners, adding that it now held about US$10bil in US-listed equities, up from US$2bil at the start of the year.

PIF’s strategy is two-pronged; building an international portfolio of investments and investing locally in projects that will help reduce Saudi Arabia’s reliance on oil.

“PIF is a patient investor with a long-term horizon.

“As such, we actively seek strategic opportunities both in Saudi Arabia and globally that have strong potential to generate significant long-term returns while further benefiting the people of Saudi Arabia and driving the country’s economic growth, ” the sovereign wealth fund said in a statement.

“These opportunities include sectors and companies that are well positioned to drive economies and lead sectors moving forward.”

The PIF has separately funded almost half of Japanese investor SoftBank’s US$100bil Vision Fund, which has been hit by losses on technology bets.

Last month the PIF’s head, Yasir al-Rumayyan, said it was looking into investment opportunities in areas such as aviation, oil and gas, and entertainment, adding that there would be a lot of potential for investment opportunities once the coronavirus crisis passes.

The PIF disclosed an 8.2% stake in coronavirus-hit Carnival Corp in April, sending the cruise operator’s shares nearly 30% higher.

The Saudi fund bought stakes in Royal Dutch Shell, Total, Eni and Equinor earlier this year, a source familiar with the transactions told Reuters on April 9.

The SEC filing last Friday showed it had a US$483.6mil stake in Shell, a US$222.3mil holding in Total and a US$481mil stake in Suncor Energy.

An earlier filing in Norway had shown the PIF had a 0.3% stake in oil and gas firm Equinor.

PIF already has a US$2bil stake in Uber Technologies and electric car company Lucid Motors. It used to own a small stake in electric carmaker Tesla, but the latest filing did not show any exposure. — Reuters

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