Thursday 09, August 2018 by Bloomberg

Tesla marks the latest high-profile bet for Saudi Wealth Fund


Saudi Arabia’s purchase of a stake of about $2 billion in Tesla Inc. is only the latest high-profile investment by its sovereign wealth fund since 2016.

The Public Investment Fund built up a less-than five per cent stake in the electric carmaker in recent months, according to a person familiar with the matter, just as Elon Musk considers taking the company private. PIF’s move comes as it seeks to turn into a $2 trillion powerhouse and help diversify Saudi Arabia’s oil-dependent economy. Here’s a selection of PIF’s recent investments and holdings:

PIF invested $3.5 billion in US ride-share company Uber Technologies Inc. in June 2016. PIF Managing Director Yasir Al-Rumayyan took a board seat at the San Francisco-based company after the deal, which valued Uber at $62.5 billion. At the time it was the biggest infusion of cash into Uber from a single investor.

The fund announced plans in October 2017 to invest about $1 billion in Virgin Group’s space companies, Virgin Galactic, The Spaceship Co. and Virgin Orbit. PIF also holds an option to invest an additional $480 million in Virgin’s space services. Saudi Arabia plans to support the ventures’ plans for human spaceflight and launching satellites into orbit and may cooperate with Virgin to create a space-centric entertainment industry in the country.

PIF agreed to commit $20 billion in May 2017 to an infrastructure investment fund with Blackstone Group LP, the world’s biggest private-equity manager. Blackstone plans to raise the same amount from other investors and with leverage, the New York-based asset manager expects to have more than $100 billion in purchasing power for infrastructure projects, primarily in the US

Saudi Arabia and SoftBank Group Corp. announced the first close of an almost $100 billion technology fund, the largest ever, in May 2017 secured from backers led by PIF and the Japanese company. PIF didn’t disclose the size of its investment, but Crown Prince Mohammed bin Salman said he might invest up to $45 billion in the fund over five years. Apple Inc., Qualcomm Inc., Foxconn Technology Group and Sharp Corp. also put in capital.

Separately, PIF also owns stakes in some of Saudi Arabia’s biggest companies on behalf of the government:

  • Holds 70 per cent of Saudi Basic Industries Corp., the world’s second-biggest chemicals maker by market value. It is now seeking to sell the 70 per cent stake to oil company Saudi Aramco.
  • Owns 70 per cent of Saudi Telecom Co., the country’s biggest phone services provider. The company competes in the local market with a unit of UAE’s Etisalat and Kuwait’s Zain.
  • Holds 44.3 per cent of National Commercial Bank, the country’s biggest lender.
  • Holds 65.4 per cent of Saudi Arabian Mining Co., or Maaden, which has interests in low-grade bauxite, phosphate, aluminum and industrial minerals.
  • Holds a 22.9 per cent stake in Samba Financial Group, the country’s third-biggest bank. Citigroup Inc. sold its stake in Samba in 2004.

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