JEDDAH — Saudi Arabia’s Public Investment Fund (PIF) holds the government’s stakes in companies including SABIC and National Commercial Bank. Saudi Arabia’s Public Investment Fund is seeking to hire bankers for international deals to help the kingdom acquire overseas technology and expertise, Bloombers News reported late Tuesday, citing four people with knowledge of the matter.
The sovereign wealth fund, which holds about $100 billion worth of stakes in local companies, is looking to appoint Saudi nationals with experience at both local and international investment banks, the people said, asking not to be identified as the talks are private. The hires will help the fund make strategic acquisitions in industries including transport, manufacturing and technology that will give Saudi Arabia access to foreign expertise and know-how, according to the people.
The PIF holds the government’s stakes in companies including Saudi Basic Industries Corporation, the world’s second biggest chemicals manufacturer, and National Commercial Bank, the Middle East’s second largest bank. Yasir Al Rumayyan, former chief executive officer at Credit Agricole-backed Saudi Fransi Capital and now an adviser to the Royal Court, is driving recruitment and the PIF’s push overseas, according to three of the people.
“PIF will no longer be an institution that focuses on mainly looking inside the kingdom,” John Sfakianakis, a Riyadh- based Middle East director at Ashmore Group, said by phone. “This is not going to be a strategy of acquiring trophy assets, but a strategy of making substantive acquisitions that have the potential for the transfer of knowledge, experience and technology to the Saudi economy.”
Saudi Arabia is tackling a slump in oil prices by cutting spending, delaying projects, tapping its foreign reserves and issuing debt as it takes on a budget deficit expected to be larger than SR400 billion ($106 billion) this year, according to the International Monetary Fund. Strategic investments would give the PIF a similar remit to Abu Dhabi’s Mubadala Development Company, which has bought stakes in companies from semiconductors to health care as the largest of the United Arab Emirates seeks to diversify its economy.
While the shift in strategy to do more international deals hasn’t been publicly announced, the PIF has already started to invest: In July it took a 38 percent stake in Korea’s Posco Engineering& Construction Company for $1.1 billion and the same month agreed to a $10 billion partnership to invest in Russia with the Russian Development and Investment Fund. It’s also planning a $2 billion investment venture with France. Both PIF and Al Rumayyan didn’t return calls and e-mails seeking comment.
