Saudi wealth fund may make major investment in building firms

Saudi Arabia’s sovereign wealth fund may invest hundreds of millions of dollars in four local construction firms as it looks to bolster the industry.

The Public Investment Fund (PIF) is in talks with Nesma Holding, El Seif Group, Almabani General Contractors and Albawani to buy minority stakes in them or their subsidiaries, according to people familiar with the matter.

The PIF has hired Rothschild and GIB Capital as advisers and is looking to take stakes of about 30 per cent in each company, the people said.

The wealth fund may also later invest in international contractors working on Saudi projects, the people said.

The $580bn PIF is relying on construction firms to build a glut of projects as part of Crown Prince Mohammed Bin Salman’s drive to wean the Saudi economy off oil. The PIF is spending hundreds of billions of dollars on tourism resorts, entertainment venues and even an entirely new city.

Talks between PIF and the four contractors are at an early stage and may not result in any deals, the people said.

The PIF and Rothschild declined to comment while, GIB Capital, Nesma, El Seif, Almabani and Albawani didn’t respond to requests to comment.