Saudi wealth fund hires $111 billion-portfolio chief, sources say

Saudi Arabia’s sovereign wealth fund, which is being transformed into a $2 trillion investment giant, hired Rashed Sharif as head of domestic investments, according to two people familiar with the matter, Bloomberg reports.

Sharif, previously chief executive officer of Riyad Bank’s investment-banking unit, will be responsible for managing the Public Investment Fund’s $111 billion portfolio of Saudi assets, the people said, asking not to be identified as the information is private. He will report to the fund’s managing director, Yasir Alrumayyan, they said.

PIF, as the fund is known, plans to become the world’s largest when the government gives it ownership of Saudi Arabian Oil Co. along with the proceeds from the oil producer’s initial public offering, expected to be the biggest listing ever. Saudi Crown Prince Mohammed Bin Salman wants to remodel the kingdom into an investment powerhouse to reduce its dependence on oil.

The fund has already started to make large international deals, including a commitment to put $20 billion into a U.S. infrastructure fund managed by Blackstone Group LP, up to $45 billion in a technology investment fund managed by SoftBank Group Corp., and a $3.5 billion stake in Uber Technologies Inc.

PIF’s domestic portfolio includes stakes in companies such as Saudi Basic Industries Corp., the world’s second-biggest chemicals manufacturer, and National Commercial Bank, the kingdom’s largest lender. In addition, the fund owns about 60 private companies, Alrumayyan said in May. The fund’s assets totaled 587 billion riyals ($157 billion) at the end of June 2016, according to the prospectus for the government’s $9 billion Islamic bond sale published in April.

A spokesman for PIF declined to comment, while a spokesman for Riyad Capital said Adel Al Ateeq will replace Sharif as CEO of Riyad Capital, without commenting on whether he has joined PIF.

By 2020, PIF plans to use half the assets not tied up in Saudi Aramco to invest abroad, up from 5 percent currently. Alrumayyan, who was tapped by Prince Mohammed in 2015, has been beefing up PIF’s team and has more than doubled the number of employees since then. The fund appointed Kevin O’Donnell as head of global private equity last year, and Cyrille Urfer as head of Global Public Markets.

Even as the fund pursues international deals, it will continue investing domestically. PIF set up a defense company, Saudi Arabian Military Industries, in May to help reduce the kingdom’s reliance on foreign purchases of military equipment and create a domestic manufacturing industry. It is also the main investor in a planned 334 square-kilometer sports and entertainment city that will be built south of Riyadh, the government said in April. The plans will include a safari area and a Six Flags Entertainment Corp. theme park.

Report courtesy Bloomberg