Saudi Sovereign Wealth Fund Closes Out October With Flurry of Deals

The Public Investment Fund signed MOUs with five Japanese banks worth $51 billion, among other deals.



Saudi Arabia’s $764 billion Public Investment Fund closed October with multiple deals, including memorandums of understanding with five Japanese financial institutions, the Hong Kong Monetary Authority and Brookfield Asset Management.
 

The Japanese memorandums of understanding include deals with Mizuho Bank, Sumitomo Mitsui Financial Group, MUFG Bank, Japan Bank for International Cooperation and Nippon Export and Investment Insurance. The sovereign wealth fund and Mizuho intend to launch an exchange-traded fund in Japan that invests in the Saudi Arabian equity market. 

“The Saudi financial market has undergone a significant transformation and experienced rapid growth,” Mizuho said in a release. “The ETF would provide various investors with access to one of the fastest-growing markets in the world.” 

The deal with Sumitomo Mitsui Financial Group would focus on “expanding investment opportunities, financing large-scale projects, and facilitating economic cooperation between Japanese companies and PIF,” according to the bank, which added that potential investments include the financing, capital markets, infrastructure, renewable energy and technology sectors. 

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The fund’s MOU with MUFG Bank is intended to focus on infrastructure and project financing investments. The deal would also include helping the PIF find investment opportunities in Japan to support Saudi Vision 2030, a Saudi government program that aims to increase diversification “economically, socially, and culturally.” 

Under the MOU with the Japan Bank for International Cooperation, the two aim to promote the PIF and Japanese companies’ joint projects in Saudi Arabia and other countries regarding “decarbonization, digital transformation, and smart city development.”  

Details of the PIF’s MoU with Nippon Export and Investment Insurance were not readily available.  

The sovereign wealth fund also signed a non-binding deal with Brookfield Asset Management for the PIF to take on the role of strategic anchor investor for Brookfield Middle East Partners. BMEP is a new private fund that aims to create a private equity vehicle for investments in Saudi Arabia and the surrounding area.  

The private fund, which has a target size of $2 billion, intends to seek out buyouts, structured solutions and other investment opportunities among the industrials, business and consumer services, technology, and health care sectors. By the terms of the deal, at least 50% of the capital would be allocated to investments in Saudi Arabia and to companies looking to expand in the country. 

The PIF also signed an MOU with the Hong Kong Monetary Authority to jointly anchor a new investment fund with a target size of $1 billion. Under the proposed deal, the PIF would seek out investments in manufacturing, renewables, fintech and health care. It would also promote foreign direct investments via Hong Kong to provide a platform for companies to have access to investments in Saudi Arabia. 

Related Stories: 

Saudi Arabia Transfers 8% of Aramco to Wealth Fund 

Irony: BlackRock, Shunned by U.S. Energy-Producing States, Teams Up With Oil-Rich Saudi Arabia 

Saudi Arabia’s Public Investment Fund Was Biggest Spender Among Peers in 2023 

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