Saudi Arabia’s mountain of cash has upended the world of professional golf. But that is only a small sliver of the money it is sinking into a number of prominent businesses elsewhere around the globe as the kingdom moves to diversify away from a dependence on oil income – and as the petro-kingdom tries to achieve its political goals.
The Saudi Public Investment Fund is a government-controlled fund that has $650 billion in assets under management, according to its most recent filing. It is aiming to top $1 trillion within a few years. A state-owned investment fund like the PIF is not unique. It is ranked only the seventh-largest in the world, according to the Sovereign Wealth Fund Institute.
While some of those are pension funds for a country’s citizens or public employees, others, like the PIF, operate the way a private sector investment firm might, trying to make money through a diversified portfolio of investments.
But what makes Saudi Arabia’s fund different from those private investment firms is that since the country faces widespread condemnation for its human rights record, its investments in sports and other entertainment companies can be seen as an attempt to polish that tarnished reputation.
The PIF’s creation of LIV Golf a year ago, reportedly at a cost of $2 billion, attracted many of the sport’s top players away from the US-based PGA Tour and Europe-based DP World Tour by offering big dollar prize money. It led to a year-long legal battle that banned LIV golfers from the established tours and brought some unwanted attention to Saudi’s human rights record. Critics of LIV Golf accused the Saudis of backing the new tour as a form of “sportswashing” its reputation.
But the legal battles, acrimony and competition for the best golfers between LIV and the PGA and DP World Tour suddenly ended Tuesday with the announcement that the three would form a combined for-profit company. The PIF plans to make undisclosed additional investments into the entity.
Soccer, video games and other investments
The chairman of the new golf series will be the chairman of state-owned petroleum company Saudi Aramco, Yasir Al-Rumayyan, who also controls English soccer team Newcastle United and is himself a governor of the PIF.
The Saudis have also been throwing big dollars at some of the world’s best known soccer players, wooing legends such as Cristiano Ronaldo and Karim Benzema to play in Saudi Pro League.
The investment in sports is not a vanity play, according to Al-Rumayyan.
“It all makes financial sense to us. We don’t like to subsidize things,” he said on an interview on CNBC Tuesday announcing the deal with the PGA.
But whether the Saudis’ investments are driven by a desire for profits or good publicity, what’s clear is that pro sports are not the only place where the Saudis are flexing their financial might.
For example, it has a total of $7.5 billion in investments in several leading video game companies, according to its most recent filing, giving it a 9% stake in Electronic Arts
(EA), a 7% stake in Take-Two Interactive and nearly a 5% stake in Activision Blizzard
(ATVI). It also owns more than 5% of Live Nation
(LYV), the concert promoter and owner of Ticketmaster, and significant stakes worth hundreds of millions each in cruiser operator Carnival Corp
(UBER) and Zoom
Its biggest US investment is in upstart electric vehicle maker Lucid
(LCDX). The PIF owns 60% of Lucid
(LCDX)’s stock, worth $7.6 billion as of Tuesday’s close. Lucid
(LCDX) recently announced the PIF would invest another $1.8 billion in the company to help fund its operations.
In 2018 when Elon Musk was thinking about taking Tesla
(TSLA) private, he sought funding from the PIF, which already had a stake in Tesla
(TSLA) at that time. It no longer lists Tesla
(TSLA) as one of its holdings. But last year it helped Musk with his $44 billion purchase of Twitter by agreeing to roll over its existing $1.9 billion investment in the social media platform to the new Musk-controlled company.
Not all of the PIF investments have been publicly disclosed. For example it’s not clear exactly how much it invested to start up LIV Golf. And the Washington Post has reported that it invested $2 billion into a private equity firm created by Jared Kushner, Donald Trump’s son-in-law, soon after Kushner left his position in the White House in January of 2021. CNN has not been able to confirm that report, but what is known is that LIV Golf tournaments have been held on Trump Organization properties.
Saudi Arabia and human rights criticisms
Many of these investments, including the creation of LIV Golf, have sparked controversy.
The PIF is chaired by Mohammed bin Salman, the Crown Prince of Saudi Arabia. Bin Salman is the man a US intelligence report names as responsible for approving the operation that led to the 2018 murder of journalist Jamal Khashoggi. Bin Salman has denied involvement in Khashoggi’s killing.
In addition, the US State Department says the Kingdom’s dismal human rights record includes free speech restrictions, torture, political prisoners and enforced disappearances.
And families of some of the victims of the Sept. 11 terrorist attack decried the news of the LIV-PGA agreement Tuesday. Some have accused the Saudi government of complicity with those attacks. Fifteen of the 19 al Qaeda terrorists who hijacked four planes were Saudi nationals, but the Saudi government has denied any involvement in the attacks. The 9/11 Commission established by Congress said in 2004 that it had found “no evidence that the Saudi government as an institution or senior Saudi officials individually funded” al Qaeda.
– CNN’s Coy Wire, Jack Bantock and Steve Almasy contributed to this report
Tense diplomatic relations may not impact trade, investment ties between India, Canada: Experts
NEW DELHI: The tense diplomatic relations between India and Canada are unlikely to impact trade and investments between the two countries as economic ties are driven by commercial considerations, according to experts. Both India and Canada trade in complementary products and do not compete on similar products.
“Hence, the trade relationship will continue to grow and not be affected by day-to-day events,” Global Trade Research Initiative (GTRI) Co-Founder Ajay Srivastava said.
Certain political developments have led to a pause in negotiations for a free trade agreement between the two countries.
On September 10, Prime Minister Narendra Modi conveyed to his Canadian counterpart Justin Trudeau India’s strong concerns about the continuing anti-India activities of extremist elements in Canada that were promoting secessionism, inciting violence against its diplomats and threatening the Indian community there.
India on Tuesday announced the expulsion of a Canadian diplomat hours after Canada asked an Indian official to leave that country, citing a “potential” Indian link to the killing of a Khalistani separatist leader in June.
Srivastava said these recent events are unlikely to affect the deep-rooted people-to-people connections, trade, and economic ties between the two nations.
Bilateral trade between India and Canada has grown significantly in recent years, reaching USD 8.16 billion in 2022-23.
India’s exports (USD 4.1 billion) to Canada include pharmaceuticals, gems and jewellery, textiles, and machinery, while Canada’s exports to India (USD 4.06 billion) include pulses, timber, pulp and paper, and mining products.
On investments, he said that Canadian pension funds will continue investing in India on grounds of India’s large market and good return on money invested.
Canadian pension funds, by the end of 2022, had invested over USD 45 billion in India, making it the fourth-largest recipient of Canadian FDI in the world.
The top sectors for Canadian pension fund investment in India include infrastructure, renewable energy, technology, and financial services.
Mumbai-based exporter and Chairman of Technocraft Industries Sharad Kumar Saraf said the present frosty relations between India and Canada are certainly a cause for concern.
“However, the bilateral trade is entirely driven by commercial considerations. Political turmoil is of a temporary nature and should not be a reason to affect trade relations,” Saraf said.
He added that even with China, India has acrimonious relations but bilateral trade continues to remain healthy.
“In fact, bilateral trade is an effective tool to improve political relations. India must make special efforts to increase our bilateral trade with Canada,” Saraf said.
India and Canada have a strong education partnership. There are over 200 educational partnerships between Indian and Canadian institutions.
In addition, over 3,19,000 Indian students are enrolled in Canadian institutions, making them the largest international student cohort in Canada, according to GTRI.
According to the Canadian Bureau for International Education (CBIE), Indian students contributed USD 4.9 billion to the Canadian economy in 2021.
Indian students are the largest international student group in Canada, accounting for 20 per cent of all international students in 2021.
Benefits of educational partnerships are mutual and hence the current situation may have no impact on the relationship, Srivastava said.
Apple supplier Foxconn aims to double India jobs and investment
Apple supplier Foxconn aims to double its workforce and investment in India by next year, a company executive said on Sunday.
Taiwan-based Foxconn, the world’s largest contract manufacturer of electronics, has rapidly expanded its presence in India by investing in manufacturing facilities in the south of the country as the company seeks to move away from China.
V Lee, Foxconn’s representative in India, in a LinkedIn post to mark Indian Prime Minister Narendra Modi’s 73rd birthday, said the company was “aiming for another doubling of employment, FDI (foreign direct investment), and business size in India” by this time next year.
He did not give more details.
Foxconn already has an iPhone factory employing 40,000 people in the state of Tamil Nadu.
In August, the state of Karnataka said the firm will invest US$600 million for two projects to make casing components for iPhones and chip-making equipment.
The company’s Chairman Liu Young-way said in an earnings briefing last month that he sees a lot of potential in India, adding: “several billion dollars in investment is only a beginning”.
Taiwan election: Foxconn’s Terry Gou taps star-powered running mate
Last month, Foxconn’s billionaire founder Terry Gou said he would run for the Taiwanese presidency in next year’s election, as an independent candidate.
He said the ruling and independence-leaning Democratic Progressive Party (DPP) was unable to offer a bright future for the island and left Foxconn’s board following his decision to run.
The firm operates the world’s largest iPhone plant, in the city of Zhengzhou in Henan province.
Foxconn to double workforce, investment in India by ‘this time next year’
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