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April 30, 2008

Saudi Arabia to launch $5.3 B sovereign wealth fund

Saudi Arabia, the bid daddy of the oil kingdoms, has finally decided that it too needs to get on to the SWF bandwagon. However, according to this Financial Times article, it's starting with a small-sized exposure. Maybe, it's waiting for oil to hit $ (fill_in-your-favorite-big-3-digit-number-here), before it expands the size.
Saudi Arabia’s Public Investment Fund is in the “final stages” of launching the kingdom’s first sovereign wealth fund. But its early financial commitment will disappoint those hoping for another megafund. Mansour Al-Maiman, secretary- general of the internally focused PIF, said an investment company wholly owned by PIF would be set up with initial capital of SR20bn ($5.3bn). The move represents Riyadh’s first tentative foray into this class of state-owned investment tool and follows months of debate at the highest level.

...“The proposed investment company’s strategy...would, on a general and basic level, be similar to that of a number of existing portfolio investors – for example Norway’s GPF [Government Pension Fund] or Singapore’s GIC [Government of Singapore Investment Corporation] – while taking into account the specific requirements of Saudi Arabia,” Mr Maiman said.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of information and networking services to the private equity and venture capital ecosystem in India. View free samples of Venture Intelligence newsletters and reports.