Fund manager BlackRock Inc and private equity firm Blackstone Group are planning to open offices in Saudi Arabia, encouraged by the investment opportunities offered by the kingdom, Crown Prince Mohammed bin Salman told Reuters.
His comments come as the Public Investment Fund (PIF), the country’s main sovereign wealth fund, is putting $20 billion into a $40-billion fund with Blackstone and unveiled plans to significantly boost its assets.
“PIF is setting a new role in the investment world,” Prince Mohammed said in an interview.
He said the fund would make money from both its recent joint investments with Japan’s SoftBank Group (9984.T) and with Blackstone.
“That’s why we made a 20 percent profit with SoftBank in five months. That‘s why we established a ... fund in Blackstone, which is expected to make a 14 percent profit and create different fields and different investments. That’s why Blackstone and BlackRock are opening here,” he said.
A spokeswoman for BlackRock, the world biggest fund manager, said that it intends to “open an office in the region to ensure we deliver the best service to our clients”.
Blackstone declined to comment.
Wall Street banks and Western fund managers are expanding in Saudi Arabia, lured by the multi-billion dollar privatization program and opening up of the kingdom’s financial markets to foreign investors.
The sale of around 5 percent of state oil giant Saudi Aramco next year is a centerpiece of Vision 2030, an ambitious reform plan championed by Prince Mohammed to diversify the Saudi economy beyond oil.
The sovereign fund PIF wants to increase its financial clout to 1.5 trillion riyal ($400 billion) by 2020 as part of the kingdom’s efforts to boost private-sector growth and wean itself off oil exports.