Saudi investment fund considering management shake-up

Saudi Arabia’s Public Investment Fund, which manages about $925 billion in assets, is considering a restructuring that would see some managers assume some of the in-house responsibilities of fund President Yasser Al-Rumayyan, people familiar with the matter told Reuters.
The Public Investment Fund, or sovereign wealth fund, aims to focus more on investments that have a good chance of success after cutting some “major projects” due to rising costs, the sources added.
The fund also wants to attract more foreign investment into some projects, two of the sources said. It may also review some spending, including on high-cost consulting assignments, a third source said.
The fund has a wide range of investment portfolios, from Zaozhuang to large multinational groups.
The fund has pumped hundreds of billions of dollars into projects, including NEOM, a vast urban and industrial development roughly the size of Belgium planned along the Red Sea coast.
Some of the Public Investment Fund’s business lines may be combined and new ones created, one of the sources said. All the sources asked not to be identified because of the privacy of the deliberations. One of the people said discussions were continuing and the timing of a potential decision was unclear. A Public Investment Fund spokesman declined to comment.
*The biggest change ever
The changes would mark the biggest government shake-up since Crown Prince Mohammed appointed Al-Rumayyan in 2015, with a mandate to advance his “Vision 2030” economic transformation plan using vast sums from the Public Investment Fund.
Since then, the fund has launched or invested in Saudi companies, creating leading national companies in financial services, aviation, tourism and industry. Assets have grown from about $150 billion in 2015 to $925 billion today.
The Public Investment Fund has recently restructured its investments in the market. In the first quarter, it cut its holdings of U.S. stocks by nearly half, to $18 billion from $35 billion in December, according to a filing with the U.S. Securities and Exchange Commission last week.
To diversify its financing, the company raised $5 billion in a bond sale in January and $3.5 billion in Islamic bonds in October, and plans to launch more bonds this year.
In March, Saudi Aramco transferred an 8% stake to the fund, doubling the Public Investment Fund’s stake in the state company to 16% and giving it the potential to make a tidy profit.
Aramco interested in buying minority stake in Repsol
Saudi oil giant Aramco is interested in buying a minority stake in the renewable energy unit of Spanish oil company Repsol, two people familiar with the matter said.
The Spanish company has opened up its renewable energy projects to investors looking to take minority stakes in its portfolio of wind farms and solar power plants to contribute to its diversification from traditional oil and gas operations to financing renewable energy and low-carbon activities in the sector.
Repsol’s renewable energy unit is valued at about 5.9 billion euros ($6.4 billion), including debt, according to a UBS Group AG research note published in April.
Spanish newspaper Expansion reported on Friday that “Aramco has contacted Repsol.” The newspaper said Saudi Aramco contacted Repsol because it was most interested in the Spanish company’s renewable energy assets in the United States. But the Saudi company has not yet submitted a formal offer, the newspaper said.[Reuters]