Saudi Arabia’s Public Investment Fund (PIF) significantly increased its holdings and investments into U.S. companies in the fourth quarter (Q4) of last year, public filings made public last week show, after slashing its exposure in Q3.
The PIF’s total investments in the U.S. market reached $12.8 billion in the fourth quarter last year, up from $7 billion in the third quarter, according to reports.
In 4Q 2020, the PIF bought significant stakes in entertainment and gaming stocks, including a $1.07 billion stake in Electronic Arts Inc. and a $1.4 billion stake in Activision Blizzard, according to a Securities and Exchange Commission filing. In the third quarter, the PIF had cut its exposure to North American equities by $3 billion, offloading some exchange traded funds (ETF) and stocks including Berkshire Hathaway, Reuters reports.
Yasir Al-Rumayyan, Governor of PIF.
Earlier in 2020, the PIF added to minority stakes in companies worldwide, including oil companies, taking advantage of market weakness caused by the COVID-19 pandemic. One of those companies, Live Nation, doubled the Kingdom’s initial investment. In April of 2020, the PIF purchased a $500 million stake in Live Nation, and since then, the stock has doubled in value. The PIF now has over $1 billion interest in the Ticketmaster parent company based upon the stock’s closing price last week.
Saudi Arabia’s government transferred a total of $40 billion from central bank foreign reserves to fund investments by sovereign wealth fund PIF in March and April last year. The PIF currently manages $400 billion in assets, and says it plans to double its assets to 4 trillion riyals ($1.07 trillion) by 2025.
Meanwhile, another of the PIF’s investments, Lucid Motors, of which it controls a majority stake, is reportedly “getting close to a deal to go public at a roughly $12-billion valuation after veteran dealmaker Michael Klein’s blank-check acquisition firm launched a financing effort to back the transaction,” according to a Reuters report, citing people familiar with the matter.
The PIF pursues a strategy that focuses on two paths: building an international portfolio of investments and investing locally in projects that will help reduce Saudi Arabia’s reliance on oil.
Other Saudi investors also upped their stakes in the U.S. market, according to a recent Saudi Gazette report, citing CMA data. The total trading by Saudis in the US stocks during the year 2020 amounted to SR323.37 billion ($86.2 billion), an increase of 606.% compared to the year 2019 when it stood at SR45.8 billion ($12.21 billion).
