New Castle United takeover is among huge gains for PIF during 2021

RIYADH – Saudi Arabia’s Public Investment Fund (PIF) was able to expand its excellent performance results, with seizing many huge investment opportunities locally and internationally during the year 2021.

The sovereign fund is continuing the momentum of growth in its assets for the second year in a row despite the challenges caused by the outbreak of coronavirus pandemic, according to a report in Al-Arabiya.net.

The PIF Governor Yasir Al-Rumayyan had said during the budget forum held in mid-December that PIF’s assets have risen, crossing the target by the end of the third quarter of this year, reaching SR1.8 trillion ($480 billion). These assets place PIF in the eighth place globally, according to data from the Sovereign Wealth Fund Institute (SWFI), compared to the size of assets before mid-2021, which amounted to SR399 billion.

The PIF had a promising start during the year 2021 with the approval of the fund’s strategy for the next five years by the Fund’s Board of Directors headed by its Chairman Crown Prince Muhammad Bin Salman. As part of its strategy, PIF aims to raise the size of its assets to exceed SR4 trillion and create about 1.8 million direct and indirect jobs by the end of 2025, and is committed to pumping at least SR150 billion annually into the local economy on a gradual increasing rate through the years until 2025.

As part of PIF’s plans as an engine for economic transformation within the Kingdom, the current year witnessed the launch of several companies in new sectors. These include the Saudi Cruise company, which aims to establish the tourism cruise sector in the Kingdom.

In February 2021, the Crown Prince announced the launch of Al-Soudah Development Company in the Asir region with expected investments exceeding SR11 billion. The company, which is wholly owned by PIF, aims to invest in infrastructure and develop the tourism and entertainment sectors, through developing the project area, which includes Al-Soudah and parts of Rijal Alma governorate so as to make it a luxurious mountain tourist destination.

PIF owns a large number of investment arms, including the Saudi Agricultural and Livestock Investment Company (SALIC), as an investment arm of the Fund in the food and agricultural sector.

In the context of strengthening its role, PIF transferred during the current year the ownership of its shares in Almarai Company to the tune of 16.32 percent, as well as 20 percent shares of the National Agricultural Development Company (NADEC) and 39.99 percent shares of the Saudi Fisheries Company so as to fall under the umbrella of SALIC.

The transfer process comes in line with PIF’s strategy for the years 2021-2025, which focuses on unlocking the capabilities of the promising non-oil sectors and contributing to achieving the food security strategy in the Kingdom.

Mega projects

The first half of this year witnessed the launch of the Sudair Solar Energy Project in Sudair Industrial City by PIF as part of an alliance that includes ACWA Power and Badeel Holding Company.

 

The Sudair Solar Project is expected to be one of the largest solar power plants in the world and the largest in the Kingdom, with an investment value of about SR3.4 billion and a production capacity of 1500 megawatts, to meet the energy needs of 185,000 housing units, in addition to reducing carbon emissions by 2.9 million tons annually.

Also locally, PIF acquired 25 percent of the shares of Emaar the Economic City, the master developer of King Abdullah Economic City. The deal was clinched after the completion of the process of transferring part of the loan worth SR2.8 billion obtained by Emaar from the Ministry of Finance to PIF in return for issuing new shares in the company.

In continuation of its active role in launching major tourism projects, such as the Red Sea Project, PIF launched “THE RIG” project, an Offshore Platform Inspired Tourism & Entertainment Project that extends over an area of more than 150,000 square meters along the Arabian Gulf.

As part of its plans to transform its capital into new investments that contribute to enhancing its long-term investment strategy, the Public Investment Fund offered 120 million shares, representing six percent of the capital of the Saudi Telecom Company (STC), to a number of local and international institutional investors, in addition to individual investors.

This is through a secondary public offering, which is the first of its kind in the Saudi stock market.

The total offering was amounted to SR12 billion ($3.2 billion), which is the largest deal in the Saudi capital market after the initial public offering of Saudi Aramco, the largest secondary public offering in the Europe, Middle East and Africa (EMEA) region in three years, and the largest secondary public offering in Central and Eastern Europe, Middle East and Africa region for about 10 years.

The PIF raised about SR3.78 billion from offering 30 percent, equivalent to 36 million shares, of its stake in the Saudi Tadawul Group, at an offering price of SR105 per share, while the fund retains a 70 percent stake with 84 million shares in the Tadawul Group.

At the same time, the Saudi Capital Market Authority approved the request of the Elm company, the digital security provider, owned by PIF, to offer 24 million shares for public subscription, representing 30 percent of the company’s shares.

Investment abroad

Globally, the PIF continued to expand its investments throughout the world during the year 2021, as an investment group led by the Fund acquired the English club Newcastle United.

According to Al-Rumayyan, the PIF has worked in entering and having a strong global presence in new sectors and countries, such as investing in Lucent Company with about $2.9 billion, and bringing global investors into the company’s public offering by the end of July 2021, and investing $2.8 billion in India.

The PIF’s investments are distributed internationally to many major companies and funds such as Blackstone, SoftBank, Reliance Retail Limited, Lucid, Uber, AquaInvest, Babylon Health, Magic Leap, and investments with the Russian Sovereign Fund and the investment program in Brazil, in addition to the French private equity investment.

At the level of stocks listed on the American markets, the PIF tripled its holdings of them to $43.45 billion in the third quarter of 2021, and added the shares of the Ali Baba group, Wal-Mart and Pinterest.

According to the PIF, investment has many facets that goes beyond projects and businesses, the most important and beautiful of which is the human being. The Fund is of the view that investment can be made in everything that contributes to building a bright future for all, and hence it works constantly to launch new sectors and companies as well as to create job opportunities and career paths with the aim of improving the quality of life.