Public Investment Fund

Can Aramco boost PIF to over $2 trillion?

The Fund
About the Fund: Established in 1971 to provide financing support for projects of strategic
significance to the national economy.
Holdings: Assets worth about $160 billion 1. Diverse portfolio made up of approximately
200 investments, of which around 20 are listed on Tadawul.
Ownership: Council of Economic and Development Affairs (CEDA) , chaired by Crown
Prince Mohammad bin Salman Al Saud.

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Analysis of Saudi Arabia's Public Investment Fund

Strategy & Objectives

To expand the fund to diversify away from oil and thus make Saudi-economy less oil
reliant.
To increase the proportion of its foreign investments to 50 percent by 2020, from 5
percent now. 2
To focus on both domestic and international deals, including expected high yield
opportunities in the local market that support private sector investments and promote
economic growth and local contents.

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Analysis of Saudi Arabia's Public Investment Fund

Recent developments/announcements
Ownership of Saudi Aramco to be transferred to PIF, along with $300 billion in other
assets. Fund value estimated to be over $2 trillion.
Initial public offering of Aramco may happen in 2017.
PIF to acquire an approximate 5% stake in Uber for an investment of $3.5 billion.
PIF to invest up to $45 billion over five years in tech sector for the Japans Soft Bank
Vision fund.

$27 billion injection from official reserves, increasing its existing assets by about 17
percent. 3

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Analysis of Saudi Arabia's Public Investment Fund

Aramco Key Figures dwarfs other oil giants

Aramco

Russian Rosneft OAO

Saudis state owned oil co.

Russia's sate-owned oil co.

10 million barrels a day.

5 million barrels a day.

260 Billion of Oil reserves. 4

18 Billion of Oil reserves.

Revenue $311 billion USD.

Revenue $60 billion.

Worth more than $2.5 trillion.*

Market Cap $35 billion. 5

* Estimated at $10 per barrel valuation of the reserves

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Analysis of Saudi Arabia's Public Investment Fund

Can Aramco boost PIF value over $2 trillion?

Aramco may not boost PIF value over $2 trillion. The state might retain full control, and
any share sale of Aramco may exclude its core crude-producing business.
Traditional investor wariness regarding state industries, which are often exposed to
political upheavals, may depress the share price.
PIF likely to focus on its domestic role to revitalize the Saudi economy, a contrast to its
foreign role to maximize returns.6

PIF likely to be a large holding company rather than a fund that can funnel large sums
into new investments.
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Analysis of Saudi Arabia's Public Investment Fund

References

1,2 https://www.bloomberg.com/news/articles/2016-05-25/key-questions-raised-by-the-2-trillion-saudi-wealth-fund-plan

https://www.bloomberg.com/news/articles/2016-11-30/saudi-arabia-to-transfer-27-billion-to-sovereign-wealth-fund

http://www.saudiaramco.com/en/home/about/key-facts-and-figures.html

https://www.bloomberg.com/news/articles/2016-01-07/too-big-to-value-why-saudi-aramco-is-in-a-league-of-its-own

http://www.reuters.com/article/us-saudi-plan-fund-idUSKCN0Y71BC

12/23/2016

Analysis of Saudi Arabia's Public Investment Fund