The Public Investment Fund, one of the most influential sovereign wealth funds in Saudi Arabia, announced that it would be setting up its premises in New York. The move comes as a reinforcement to the kingdom’s ongoing interest in Wall Street and Silicon Valley investment opportunities. Over the recent years, it has already poured its billions upon billions in the innovative startups in the U.S., and more money is to come.
The Public Investment Fund, or PIF, is run by Mohammed bin Salman, the kingdom’s Crown Prince. In a statement, the fund’s managing director said that the organization was seeking to grow its strategic presence in global innovation hubs, where it was financing massive investment portfolios. Apart from New York and Silicon Valley, the fund also plans to establish its office in London.
Saudi Arabia is relying massively on PIF, as it is instrumental to diversifying the country’s economy, which is currently over-dependent on its oil reserves. The proposed diversification was championed by the Crown Prince as the key priority for the next few decades. Another crucial investment venue for PIF is boosting domestic spending, particularly in the entertainment and tourist industries. The fund management says Saudis spend some $20 billion on tourism overseas, so the fund aims to redirect this money back to the kingdom. As part of this effort, it is also financing Neom, a superproject of a futuristic city running on drones and self-driving cars. The project is estimated at a whopping $500 billion.
To make sure these ambitious plans translate into reality, PIF is investing heavily in its future growth. Its management is planning to grow the ratio of foreign investments to 50 percent from the current 10 percent by 2030 as well as double its current assets to $400 billion. The number of personnel is also expected to grow to some 2,000 in the next five years.
In 2016, the wealth fund invested over $3 billion in Uber. Tesla CEO Elon Musk estimated the fund’s share in his company at about 5 percent. However, Saudi Arabia encountered a global backlash after a shocking murder of its dissident journalist Jamal Khashoggi in Istanbul. Officials in Riyadh had denied any involvement in the crime. However, the U.S. authorities announced that the murder could not be carried out, had it not been directly sanctioned by bin Salman. In response to the murder, many global companies canceled their participation in the grand investment conference in Riyadh.