Saudi Arabia investing billions in global technology fund

October 15, 2016

Jeddah, Oct 15: Public Investment Fund (PIF) has taken another strong step in its mission to support Saudi Vision 2030 with its move to set up a strategic partnership with SoftBank Group Corp. (SBG), according to top businessmen and analysts.

technology

“This is a bold move by the PIF to explore global opportunities into tech ventures,” Basil Al-Ghalayini, CEO of BMG Financial Group, told Arab News.

His comments came as the PIF joined forces with Japanese telecom firm SoftBank to form a tech investment fund worth as much as $100 billion, making it one of the largest on the planet.

PIF — Saudi Arabia's sovereign wealth fund — is expected to put up as much as $45 billion of the money, with SoftBank throwing in at least $25 billion.

PIF, under the leadership of Deputy Crown Prince Mohammed bin Salman, has revised its long-term investment strategy to coincide with the country’s Vision 2030.

Saudi authorities have described SoftBank’s "strong investment performance" as a key reason for investing in the new tech fund.

Ihsan Bu-Hulaiga, head of the Joatha Consulting, told Arab News that the new fund reflects the implementation of PIF’s new strategy after restructuring and expanding its financial might from $160 billion to $2 trillion.

He said: “The engagement of PIF with SoftBank is more a meeting of mindsets than a mere financial collaboration.”

Bu-Hulaiga added: “In perspective, PIF compliments with SoftBank experience to provide benefits to highly selective global technology start-ups.”

In a statement, SBG said it will use its deep operational expertise and network of portfolio companies in order to add value to the fund’s investments.

“Making such investments is critical for developing a stake in the most rapidly developing and transformative sector of the global economy,” a Gulf analyst, who declined to be named, told Arab News.

“The key is to build linkages that maximize the broader benefits for the Saudi economy. This is a positive beginning but what matters is all that is built around it: Partnerships, alliances, knowledge transfer, research, etc,” he added.

The SBG statement said the fund will be managed in the United Kingdom by a subsidiary of SoftBank Group Corp. and will deploy capital from SBG and investment partners.

SBG expects to invest at least $25 billion over the next 5 years. SBG has concluded a non-binding memorandum of understanding on Oct. 12, with the Public Investment Fund under which the PIF will consider investing in the Fund and becoming the lead investment partner, with the potential investment size of up to $45 billion over the next five years.

In addition, a few large global investors are in active dialogue to join SBG and PIF to participate in this fund. The overall potential size of the fund can go up to $100 billion, according to the SBG statement.

“The Public Investment Fund is focused on achieving attractive long-term financial returns from its investments at home and abroad, as well as supporting the Kingdom’s Vision 2030 strategy to develop a diversified economy. We are delighted to sign this MOU with SBG given the long history, established industry relationships and strong investment performance of SBG and Masayoshi Son,” the Saudi deputy crown prince was quoted as saying in the statement.

Masayoshi Son, chairman & CEO of SoftBank Group Corp., commented: “With the establishment of the SoftBank Vision Fund, we will be able to step up investments in technology companies globally. Over the next decade, the SoftBank Vision Fund will be the biggest investor in the technology sector. We will further accelerate the Information Revolution by contributing to its development.”

Rajeev Misra, head of strategic finance, SoftBank Group, is leading the fund project for SBG.

SBG has engaged former Deutsche banker Nizar Al-Bassam and ex-Goldman partner Dalinc Ariburnu for the project. PIF also had its own team of experts engaged.

Commenting on the tech investment fund, Sami A. Al-Nwaisir, chairman of Al-Sami Holding Group, told Arab News: “The PIF’s move is consistent with Saudi Vision 2030 in order to build the largest sovereign fund and, at the same time, increase the possibility of generating more revenues to the Saudi budget.”

The general role of the PIF is to function like a tool in framing fiscal policies in order to bring stability to the economy and provide liquidity, he pointed out.

Al-Ghalayini also said that the PIF’s partnership goes in line with the government's Vision 2030 program and plans to diversify revenue away from oil.

“But with such a fund size of $100 billion, it will be worth watching where the fund plans to deploy this capital,” he said.

“Furthermore, with such a supply into the Venture Capitals’ funding channels, valuations of target companies might go up,” he added.

Economists say the PIF’s latest move strengthens Saudi Arabia’s ambitious plan to create a huge sovereign wealth fund that would be worth SR7 trillion ($1.9 trillion) by 2030, which would make it by far the biggest in the world.

PIF earlier invested $3.5 billion in US ride-hailing firm Uber.

At an annual rate of $20 billion, the new London-based fund could at current levels account for roughly a fifth of global venture capital investment, Reuters reported.

In the year to September, venture capital-backed companies globally raised $79 billion, according to data from KPMG and CB Insights, with tech start-ups attracting the lion's share of that cash.

“SoftBank Chairman Masayoshi Son is very good at looking for companies with big growth prospects, and that will create fierce competition," said Hiroyuki Kuroda, secretary general of the Venture Enterprise Center in Japan, was quoted as saying in the Reuters report.

SoftBank, a $68 billion telecommunications and tech investment behemoth, has also been stepping up investment in new areas. It agreed to buy UK chip design firm Arm Holdings in July in Japan's largest ever outbound deal.

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News Network
July 13,2020

Dubai, July 13: An explosion caused by a gas leak damaged a restaurant, and nearby shops at a residential building in Dubai on Monday morning. 

According to Brigadier Abdul Haleem Al Hashemi, Deputy Director of Al Qusais Police Station, the incident took place at 4am when the restaurant was closed.

No injuries were reported, but two nearby shops, a pharmacy, a salon and three cars were severely damaged.

"Dubai Police patrols were immediately dispatched to the scene and worked with Dubai Civil Defense to evacuate residents of the two-storey building as a precautionary measure," Brig Al Hashimi explained.

Preliminary investigations showed that the blast was caused by a gas leak, the officer said. The Crime Scene Department of the General Department of Forensics and Criminology in Dubai is studying the evidence collected from the site and will be preparing the final report on the accident.

Brig Al Hashimi urged restaurant owners to ensure that all safety and security systems at their outlets are in good condition. Regular maintenance checks should also be conducted on all pipes and gas regulators, especially during the summer season.

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KT
April 21,2020

Abu Dhabi, Apr 21: The UAE has reported a further 490 new coronavirus infections, after conducting more than 30,000 new tests, bringing the total number of COVID-19 patients to 7,755.

According to the Ministry of Health and Prevention (MoHAP), three more coronavirus deaths have been confirmed, taking to 46 the country’s death toll.

The ministry revealed that it conducted more than 30,000 additional COVID-19 tests among UAE citizens and residents, using state-of-the-art technology in line with its plans to intensify virus screening in order to bring COVID-19 under control.

The accelerated investigative measures resulted in the detection of 490 new coronavirus cases among various nationalities, all of whom are in a stable condition and receiving the necessary care.

The deceased are of Asian nationalities and had pre-existing conditions coinciding with being infected with coronavirus, which resulted in complications that led to their death.

The ministry expressed its sincere condolences to the families of the deceased and wished a speedy recovery to all patients, calling on the public to cooperate with health authorities and comply with all precautionary measures, particularly social distancing protocols, to ensure the safety and protection of the public.

The ministry also announced the full recovery of 83 new cases after receiving the necessary treatment, taking to 1443 the total of those now recovered from the virus in the UAE.

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News Network
April 18,2020

Apr 18: Taking a strong notice of Islamophobia on social media, Princess Hend Al Qassimi, a member of the royal family of United Arab Emirates, called out a series of tweets by a user named Saurabh Upadhyay.

Upadhyay had posted tweets attacking Muslims over the Tablighi Jamaat congregation held in March in Delhi that led to surge of coronavirus cases cases in India. He also gave into rumours of muslims ‘spiting on food’ to spread the virus.

Princess Qassimi shared the screenshots of his tweets and warned that those engaging in racism and Islamophobia will have to pay penalty and will be made to leave UAE. Upadhyay has apparently deactivated his Twitter handle now.

Responding to his earlier posts, she though the ruling family of UAE is “friends with Indians”, his rudeness was “not welcome”.

“All employees are paid to work, no one comes for free. You make your bread and butter from this land which you scorn and your ridicule will not go unnoticed,” she wrote.

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