Saudi Arabia’s PIF, Bahrain Mumtalakat to boost cooperation, investment

The sovereign wealth funds of Saudi Arabia and Bahrain have signed an MoU to boost cooperation and investment in strategic sectors.

The agreement aims to expand cooperation between the two parties and enable new and promising investment opportunities in Bahrain, the Public Investment Fund (PIF) and Mumtalakat said in a joint statement.

PIF said the MoU provides investment opportunities that will enhance the wealth fund’s investments in Bahrain while allowing for the creation of additional opportunities for the private sector in both countries.

“The MoU with Bahrain’s Mumtalakat is an important step that aims to contribute to enhancing collaboration and investment opportunities in various sectors in Bahrain. The MoU also supports PIF’s objectives of building long-term strategic regional partnerships that bring additional value to local economies,” said Yazeed A. Al-Humied, deputy Governor and Head of MENA Investments at PIF.

The agreement is expected to achieve sustainable returns that will maximise PIF’s assets under management and diversify the economy in line with Saudi Arabia’s Vision 2030.

Under the agreement,  Saudi Arabia’s wealth fund seeks to increase its investments in strategic sectors in Bahrain while Mumtalakat aims to explore attractive investment opportunities for cooperation and partnership with PIF.

The signing of the MoU follows the establishment of the Saudi-Bahraini Investment Company – a unit of Saudi wealth fund – which will invest as much as $5bn in multiple in Bahrain.

PIF drives sustainable growth

PIF is among GCC state investors that are directly supporting peer governments in neighbouring countries through investments, lending or deposits at the central bank.

The $700bn wealth fund emerged as the world’s most active sovereign investor last year, boosting its deal activity to a record $31.6bn, according to research consultancy Global SWF.

Saudi Arabia’s sovereign fund plans to increase its annual deployment of capital to $70bn after 2025, up from between $40bn and $50bn of capital it currently puts to work on an annual basis.

The fund is investing in a broad range of sectors as part of the kingdom’s Vision 2030 economic diversification strategy.

PIF 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.

Read: Why GCC wealth funds are becoming engines of regional growth