Saudi hometown ambitions could clip wealth fund’s wings

Saudi Arabia’s Public Investment Fund risks being pulled deeper into Crown Prince Mohammad bin Salman’s domestic projects, curbing its international ambitions and tying its fortunes closer to its home market, four sources familiar with its strategy said. Unusually for a sovereign wealth fund, which typically is solely focused on generating wealth for future generations, PIF has a two-pronged mandate — it is also expected to develop domestic projects that will reduce Saudi Arabia’s reliance on oil. That means PIF acting as a cornerstone investor on some major hometown ventures with foreign investors expected to join in.

PIF’s domestic responsibilities also make it more challenging for the $300 billion fund to resume its previous frenetic pace of overseas investment.

PIF also said significant progress had been made in financing plans for the domestic projects.

The PIF could invest in a second technology fund currently being raised by SoftBank.

PIF has declined to give any comment on its intentions for the second technology fund.

To raise funds for its investments, PIF sold a 70 percent stake in petrochemicals firm Saudi Basic Industries Corp (SABIC) to Aramco in March for $69 billion and borrowed $11 billion from the loan market.

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Article source: http://www.dailystar.com.lb//Business/International/2019/Jun-29/486362-saudi-hometown-ambitions-could-clip-wealth-funds-wings.ashx