Saudi Public Investment Fund eyes China deals, to open Asia office

Late evening sunlight is seen reflected off the Kingdom Tower in Riyadh, Saudi Arabia, on Thursday, Dec. 1, 2016. Photographer: Simon Dawson/Bloomberg

Saudi Arabia’s sovereign wealth fund is exploring Chinese investments, with serious plans to open an Asia office.

To expand its overseas footprint, the fund is already opening offices in New York, London and San Francisco.

In an interview with CNBC, Saudi Public Investment Fund’s managing director Yasir Othman Al-Rumayyan said he has been “impressed” by the asset managers, companies and Chinese entrepreneurs he has met so far. He cited that while China’s GDP growth has slowed, it is still faster than most countries globally, making it a possible long-term bet.

Al-Rumayyan, however, stressed that the fund’s top focus will remain in the US, where he believes the most innovation is still happening today. He added that the fund has indirectly and directly deployed about $50 billion in the US over the last two years.

Some notable US investments include a 2017 partnership with investment company Blackstone to invest over $100 billion in US infrastructure assets. The Saudi fund committed $20 billion to the venture, which is expected to have $40 billion in total equity commitments in a permanent capital vehicle. It has also invested billions into Silicon Valley startups like Uber, as well as through SoftBank’s Vision Fund.

The Saudi Public Investment Fund is one of the largest in the Middle East, with about $300 billion in assets under management. It aims to push that to $2 trillion by 2030 and diversify its heavily domestic portfolio.

According to Al-Rumayyan, Saudi investment comprises 86 per cent of its portfolio. The fund intends to bring that to 50:50 for international and domestic investments respectively by 2030.

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