BlackRock to launch PIF-backed Saudi investment platform

Global asset management firm BlackRock said on Tuesday that it will set up a new investment platform in Saudi Arabia, backed by up to $5bn from the kingdom’s sovereign wealth fund, the Public Investment Fund (PIF).

The new entity, known as BlackRock Riyadh Investment Management, will receive additional cash injection from local and international investors.

The Riyadh-based investment platform will invest across a range of asset classes. It is expected to accelerate the growth of capital markets in Saudi Arabia by supporting foreign institutional investment in the Gulf state.

“The continued growth of the kingdom’s capital markets and diversification of its financial sector will contribute to future prosperity for its citizens, the competitiveness of its companies and the resilience of its economy,” said Larry Fink, chairman and CEO of BlackRock.

“Saudi Arabia has become an increasingly attractive destination for international investment as Vision 2030 comes to life, and we are pleased to offer investors from around the world the opportunity to take part in this exciting, long-term opportunity.”

#PIF and BlackRock today announced the signing of a MoU by which BlackRock will establish a Riyadh-based multi-asset class investment platform.

Learn More: https://t.co/uVkTizI2WN pic.twitter.com/urhAYwgVcc

— Public Investment Fund (@PIF_en) April 30, 2024

The two parties said BlackRock Riyadh Investment will incorporate strategies across asset classes, including private and public markets. The platform’s investments will be managed by a Riyadh-based portfolio management team and supported by BlackRock.

“First-of-its-kind partnership aligns with PIF’s initiatives to drive further growth of the Saudi capital markets ecosystem and international investment management sector,” PIF said in a statement.

BlackRock Riyadh Investment will be fully integrated with BlackRock’s investment capabilities and operating platform to leverage the US asset manager’s global market expertise and technology while advancing local investment capabilities.

PIF said BlackRock’s Financial Markets Advisory group aims to support the platform’s adjacent initiatives to deepen capital markets and enhance market structure.

The non-binding MoU between PIF and BlackRock is subject to regulatory approvals and certain agreed milestones.

PIF accelerates diversification

Meanwhile, PIF is central to Crown Prince and Prime Minister Mohammad bin Salman’s plans to diversify the economy away from reliance on oil revenues by building new industries and investing in infrastructure development projects.

Since 2017, the $925bn sovereign fund has created 94 new companies and over 644,000 direct and indirect jobs. Last October, PI launched its Managers’ Gate platform and the Portfolio Management Development Program – a digital platform for collaboration between the fund and external fund managers.

PIF accounted for about a quarter of the almost $124bn spent by sovereign wealth funds worldwide last year, a Global SWF report showed in January.

The fund owns stakes in tech companies such as ride-hailing firm Uber Technologies, soccer teams including English Premier League’s Newcastle United, electric carmakers Lucid and Ceer and is funding a host of new cities in the desert such as the $500bn futuristic NEOM City and the Red Sea Development Company’s mega tourism project.

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