Saudi Arabia’s Public Investment Fund continues its rapid ascent with total assets under management estimated at US$730 billion, following the transfer of a 4% stake in the oil giant Saudi Aramco to the sovereign wealth fund’s wholly owned subsidiary, Sanabil Investments.
Crown Prince Mohammed bin Salman, who also serves as PIF’s Chairman, said that this transfer is “a continuation of Saudi Arabia’s long-term initiatives to boost and diversify the national economy and expand investment opportunities in line with Saudi Vision 2030. The transfer will also solidify PIF’s strong financial position and credit rating.”
The value of the stake is US$81 billion, based on today’s closing price. Sanabil was estimated to have had at least US$20 billion in assets under management before the transfer, indicating its portfolio has now swelled to US$100 billion.
The subsidiary is focused on venture capital, suggesting the Aramco stake could be steadily divested to fund new investments. Sanabil was founded in 2009 as a state-owned investor in its own right, before being absorbed by PIF. According to its website, it invests approximately US$2 billion per annum in venture and growth capital and small buyouts.
Last week, Sanabil disclosed its investment partners, which include high-profile private equity and VC firms such as Blackstone, KKR, Apollo, Brookfield, Hellman & Friedman and CVC. If Sanabil utilizes its stake by selling it off on the Tadawul, it could recycle the capital to invest in startups, both directly and through general partners.
Last month, PIF Governor Yasir Al-Rumayyan announced at the Future Investment Initiative (FII) meeting in Miami that the fund had US$650 billion of assets. With the Aramco stake transfer, PIF’s total AUM now exceeds US$730 billion – putting on course to meet its target of US$1 trillion by 2025 and US$2-3 trillion by 2030. Such growth would turn the Saudi state-owned investor into the biggest sovereign wealth fund in history.
To almost triple its size in 2022-2030, PIF needs to increase in its portfolio size of US$14 billion per month – a staggering rate of growth that is only likely to be achieved through more asset transfers from the government.