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مع محافظ صندوق الاستثمارات العامة | بودكاست سقراط

إذاعة ثمانية・73 minutes read

Omar Jeraisy discusses Saudi Arabia's Vision 2030 with Mr. Yasir Al-Rumayyan, focusing on the establishment, strategy, and future areas of investment of the Public Investment Fund, emphasizing revenue growth and job creation as key goals with a profit-driven approach.

Insights

  • The Public Investment Fund (PIF) under the leadership of Yasir Al-Rumayyan has undergone a strategic transformation, focusing on rigorous investment strategies and conservative asset evaluations, positioning it as a key driver of the Saudi economy.
  • The Fund's governance structure emphasizes decision-making based on specific guidelines, regulations, and internal assessments, with a focus on international investments, board governance, and investment committee reviews.
  • The Fund's investment approach involves supporting and growing existing companies, like ACWA POWER, by improving performance and overcoming obstacles, aiming to enhance local content in projects and create significant job opportunities within the Saudi economy.

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Recent questions

  • What is the focus of the Public Investment Fund's investments?

    Strategic investments for revenue growth and economic transformation.

  • How does the Public Investment Fund make investment decisions?

    Through a structured process involving assessment and approval.

  • What is the Public Investment Fund's governance structure like?

    Evolving to focus on expertise and strategic criteria.

  • How does the Public Investment Fund approach real estate development projects?

    Emphasizing accurate planning and design for success.

  • What is the Public Investment Fund's goal for asset growth?

    Targeting 1 trillion USD in assets by 2025 through strategic resources.

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Summary

00:00

"PIF Strategy and Vision 2030 Insights"

  • Omar Jeraisy hosts a show discussing Saudi Arabia's Vision 2030 with leaders like Mr. Yasir Al-Rumayyan, Governor of the Public Investment Fund (PIF).
  • The episode delves into the establishment and strategy of the PIF, including investment portfolios, employee numbers, targets, and revenue changes.
  • Questions arise about PIF's competition with the private sector, the outcomes of established companies, and future focuses like the aviation and entertainment sectors.
  • Investments in Newcastle United and SoftBank are discussed, with a focus on revenues and losses.
  • Economic effects and job opportunities are highlighted, with plans to delve deeper into PIF's portfolios in future episodes.
  • Yasir Al-Rumayyan shares his sports background, particularly his interest in golf and how it became a family activity.
  • Despite a busy schedule, Al-Rumayyan emphasizes the importance of balancing sports, family, and work in his life.
  • Al-Rumayyan's journey to becoming the Governor of PIF began with a call from the Royal Court and his role in transforming Saudi Fransi Capital.
  • The Crown Prince's vision for PIF involved a thorough diagnosis of the Fund's status, benchmarking against other sovereign wealth funds, and the creation of six investment pools.
  • Weekly meetings with the board of directors under the Crown Prince's supervision involved intense discussions and planning, focusing on evidence-based decision-making and the development of a comprehensive investment strategy.

19:38

Strategic Investments Drive Saudi Fund's Success

  • Projects are categorized into pools based on internal assessments, with the first 4 pools being domestic and the fifth and sixth for international investments.
  • International investments were historically less than 1.5%, often politically motivated, like in Arab countries, with notable investments in POSCO steel in South Korea.
  • Two pools focus on a balanced portfolio, investing across various sectors, including fund managers, private equity, and public markets, primarily indirect investments.
  • Strategic investments, like SoftBank Vision Fund and BlackStone infrastructure fund, are direct or non-direct with a strategic layout, positioning the Fund globally.
  • Initial team building for the Fund involved moving to the Digital City, starting with a maintenance building, employing key individuals like Turki Nwaiser and Yazeed Al Hmayid.
  • The Fund's revenue strategy transitioned from conserving state assets to generating income, with revenues increasing from 2-3% to over 8% through strategic investments and asset evaluations.
  • Notable investments like Lucid and Sanabil significantly contributed to revenue growth, with Lucid's market cap reaching 60 billion and Sanabil's capital increasing from 7 billion to 12 billion.
  • Land assets, including NEOM, the Red Sea, and Qiddiya, are valued at 1 riyal each in the books until commercial operations or sales occur, reflecting conservative asset evaluation practices.
  • Evaluation processes are stringent, following IFRS standards and involving external auditors to ensure accurate and conservative asset valuations.
  • The Public Investment Fund's growth and success are attributed to strategic investments, conservative asset evaluations, and the leadership and vision of Prince Mohammed, positioning the Fund as a key driver of the Saudi economy.

39:34

"Fund Governance and Investments During Pandemic"

  • The Fund operates with a board of directors and governance, making decisions based on specific guidelines and regulations.
  • Decisions within the Fund are made following the Fund's bylaws, relevant country regulations, and powers delegated by the board to the governor and committees.
  • International investments within the Fund are initiated by proposals from the chairman or board, management's interest, or external opportunities.
  • Investment proposals undergo assessment by management teams and internal committees for approval or rejection.
  • The Management Investment Committee (MIC) reviews investment decisions, with the chairman overseeing major decisions.
  • Disagreements in decisions are resolved through voting, with the majority prevailing, even against the chairman's vote.
  • During the COVID-19 pandemic, the Fund made successful investments totaling around $35 billion, yielding approximately 40% in returns.
  • The Fund's investment strategies during the pandemic included strategic positions, opportunistic investments, and rescue financing for companies.
  • The Fund's governance structure has evolved to focus on selecting board members based on specific criteria like financial, strategic, and leadership expertise.
  • The Fund's role in economic transformation involves founding new companies and entering promising sectors while ensuring fair competition and economic growth without hindering the private sector.

01:00:38

Investing in Existing Companies for Growth

  • The approach taken by the individual in the text involves investing in existing contracting companies rather than establishing a new one.
  • The focus is on supporting and growing companies already in operation, improving their performance and overcoming obstacles.
  • ACWA POWER is highlighted as a successful example of this strategy, with increased performance and involvement in the local stock market.
  • The individual emphasizes creating infrastructure and masterplans, offering opportunities for real estate developers to work with them.
  • A systematic approach to monitoring the performance of over 50 companies is described, with regular reports sent to the chairman and the individual.
  • A new local development administration is established, led by Jerry Todd, to coordinate various investments and projects.
  • The goal is to enhance local content in projects, aiming for 60% local involvement.
  • The Public Investment Fund aims to spend 150-200 billion Saudi Riyal annually in the local economy, focusing on profitable returns and economic multipliers.
  • The Fund aims to create 1M 800K job opportunities through various investments and projects.
  • A detailed strategy is outlined to reach a target of 1 trillion USD in assets by 2025, with government injections, exits, and profits as key resources.

01:19:44

"Strategic Investments in Football Clubs Discussed"

  • HRH chairman emphasizes self-reliance in projects before seeking support
  • Newcastle United investment discussed, focusing on strategic choice and potential profit
  • Public Investment Fund's interest in football and the English Premier League explained
  • Details of the acquisition of Newcastle United, contrasting with other offers
  • Profit-driven approach highlighted in the choice of club investment
  • Newcastle United's unique appeal due to being the sole club in its city
  • Potential profit and strategic importance of the investment in Newcastle United
  • Plans for potential future investments in other clubs and incubators
  • Challenges and time-consuming nature of real estate portfolio projects discussed
  • Importance of accurate planning and design in real estate development projects

01:39:14

Global Investment Fund Growth and Success Story

  • The Global Investment Fund initially had 100-150 people, but now has around 1,800 members, expected to exceed 2,000 by year-end.
  • The Fund lacked technical expertise, staff, processes, and systems initially, but now has offices in New York, London, and Hong Kong, improving performance.
  • Direct investments by the Fund currently outperform most other funds, providing access to deal flow and opportunities for control and active involvement.
  • Lucid Motors faces production delays due to supply chain issues and quality assurance challenges, impacting the availability of their vehicles.
  • The Fund is working on establishing a Saudi factory for high-end cars, starting with Lucid Air and planning to expand to SUVs for broader market appeal.
  • Abu Faisal highlights the importance of rationality, logical thinking, and prioritization, learned from the Crown Prince, emphasizing the significance of seeing the big picture and managing details effectively.
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