Saudi sovereign wealth fund loads up on Alibaba, Just Eat, Lucid Motors, Pinterest and Walmart as it triples its holdings of US stocks

• The US portfolio of the Saudi Public Investment Fund (PIF) surged to US$43.45 billion in the third quarter, according to a US SEC filing
• The Saudi Arabian sovereign wealth fund bought shares of Alibaba, Walmart, Pinterest, Just Eat, Ballard Power, and Lucid Motors

The Public Investment Fund (PIF), Saudi Arabia’s sovereign wealth fund, nearly tripled its holdings of US-listed stocks to US$43.45 billion in the third quarter, adding shares of Alibaba Group Holding, Walmart and Pinterest.

Its US-listed stock holdings in the quarter ended September 30 increased from nearly US$16 billion in the prior quarter, according to a US Securities and Exchange Commission filing.

Other stocks it bought included Just Eat Takeaway.com and Ballard Power Systems.

The PIF, which manages US$430 billion in assets, is at the centre of Saudi Arabia’s plans to transform the economy by creating new sectors and diversifying revenues away from oil.

The PIF also owns a 62.72 per cent stake in electric car company Lucid, which has a market value of about US$71 billion, a significant boost in value from the end of September.

“The Q3 figure is indeed significantly larger than Q2, but most of the increase is due to Lucid Motors’ IPO in July,” said Diego Lopez, managing director at Global SWF, an industry data specialist. “If you isolate the effect of Lucid, the US equity holdings increased only 11 per cent, from US$15.9 billion to US$17.7 billion.”

Lucid’s listing in July was a huge dividend for the Saudi sovereign wealth fund, which invested more than US$1 billion in the company in 2018 for a substantial stake and invested more in February. The PIF also owns a 3.75 per cent stake in ride-sharing company Uber Technologies.

The PIF is pursuing a two-pronged strategy, building an international portfolio of investments while also investing locally in projects that will help reduce Saudi Arabia’s reliance on oil.

“While PIF’s strategy in 2020 seemed to be focused on short-term gains, we’ve seen a change in 2021, with only one divestment so far,” Lopez said, adding that the focus is moving towards private partnerships.

PIF has also invested US$45 billion in Softbank’s inaugural US$100 billion technology fund.

The PIF has boosted its firepower from several funding sources in recent years, including loans and a US$40 billion transfer from central bank reserves last year.

Author: Reuters, SCMP