BlackRock Pact Showcases Rising Dealmaker at Saudi Wealth Fund
(Bloomberg) -- When BlackRock Inc. landed a $5 billion investment pledge from Riyadh in April, pictured smiling alongside Larry Fink and Public Investment Fund Governor Yasir Al Rumayyan was an executive seen as a rising force within the sovereign investor.
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That man, Yazeed Al Humied, is one of the fund’s two deputy governors and runs its Middle East and North Africa unit. While this was regarded as the less glamorous arm of the PIF for years, the $925 billion fund’s growing domestic focus means that Al Humied is now increasingly being courted by the titans of investing.
He was the executive handpicked to deliver a blunt message to firms eyeing business and big checks from Riyadh. Foreign outfits should set up “not just their reception desks but their kitchens” in Saudi Arabia if they want to continue raising money from the PIF, Al Humied told attendees at a summit last year.
He’s now being sought out by international firms looking to set up Saudi entities and raise money for domestic investments, according to people familiar with the matter, who declined to be identified discussing confidential information.
Since such agreements are mostly routed through the fund’s local investments arm, Al Humied’s leading the charge for a more aggressive PIF that, like other Gulf funds, is increasingly asking big money managers to offer concessions in return for cash.
In one sign that he’s been groomed for a higher profile role, Al Humied is among many senior executives who have been offered training similar to what was made available to Al Rumayyan, according to one of the people. This includes language coaching and tips on how to interact with executives at the top echelons of world finance, the person said.Representatives for the fund declined to comment.
Employee Number 3
Al Humied, who is in his early forties, and Al Rumayyan, 54, go back over a decade, having previously worked together at the Saudi markets regulator. He jumped at the chance to join the PIF during the early days of its transformation without even asking questions about salary or the role, Al Rumayyan said in a 2022 interview. It was the same for Turqi Al Nowaiser, who is in his late forties and oversees international investments. “They believed in the cause, and maybe in me personally, and of course in Prince Mohammed,” Al Rumayyan said at the time.
Both executives sit on key PIF committees, giving them oversight of all the fund’s activities. Officially PIF employee number 3, Al Humied’s role was viewed as a lower-profile one compared to Al Nowaiser — employee number 2 — even after both were named deputy governors in 2021.This was a time when the PIF routinely splashed out large sums on overseas deals that upended business, technology and even sport. It famously made a verbal commitment of $45 billion to Masayoshi Son’s Vision Fund over the course of a 45-minute meeting. The tech vehicle backed a bevy of startups, and many of those bets blew up.Now, with crude prices below levels Saudi Arabia needs to balance its budget and foreign direct investment well shy of Crown Prince Mohammed bin Salman’s $100 billion target, the PIF has emerged as the main vehicle driving the de-facto ruler’s trillion-dollar Vision 2030 agenda.
That’s prompted a reckoning for Riyadh, and officials are increasingly doing deals with an eye on bringing in firms and expertise into the kingdom. Wall Street giants, who previously raised money from the fund to invest overseas, are being asked to deploy it within the region.“Local investments will likely stay as the most significant part of PIF’s portfolio by far,” said Diego Lopez, founder and managing director of Global SWF. “In that context, we see the role of Yazeed as increasingly important, especially for the next five years until the completion of Saudi Vision 2030, if not beyond.”
BlackRock, Brookfield
Al Humied already manages close to two-thirds of the PIF’s assets, including its two largest asset pools.
Domestic impact and the acquisition of technology to develop the Saudi workforce is included in two of five criteria that the PIF says it uses to assess how it makes investments. The others include returns, risk, the opportunity to get access to a new company or industry or synergies with existing businesses.
BlackRock, for one, has been intensifying efforts to expand in the kingdom. The world’s largest asset manager has committed to build a Riyadh-based investments team as part of an agreement shepherded by Al Humied’s group.
Rival firms are making moves of their own. Brookfield Asset Management Ltd. has explored raising separate pools of capital to invest in the Middle East, and Goldman Sachs Group Inc. is working on setting up a fund focused on the region. The PIF’s Middle East unit, and Al Humied, will be key to some of those efforts.
To be sure, Al Rumayyan — who helped chart the fund’s evolution from a sleepy holding company into a global force that’s backed the world’s biggest fund managers and private equity deals — remains front and center.He’s a key adviser to the crown prince, is the chairman of Saudi Aramco as well as the English Premier League’s Newcastle United Football Club, and sits on the board of Asia's richest person Mukesh Ambani’s flagship firm. Catapulted from running a local investment bank to overseeing one of the fastest growing wealth funds, he’s among the most influential names in finance.
But the powerful executive is now leaning more on Al Humied, people familiar with the matter said. In contrast to Al Rumayyan, who’s the face of the fund — he makes regular media appearances, headlines conferences and has been pictured playing golf with former US President Donald Trump — Al Humied is more low-key. People familiar with the matter describe him as level-headed and approachable. He’s also managed to forge strong relationships within the government, liaising with ministers on key aspects of the fund’s inner workings — including, as chief of staff, leading the way on amending bylaws to allow the PIF to borrow money.Behind the scenes, his group has orchestrated landmark agreements including a $4.9 billion acquisition of video game publisher Scopely to kickstart the local gaming industry and helped set up a $100 billion technology investor, Alat.
This also means Al Humied is an influential voice on who gets to be part of management teams at multiple PIF portfolio firms. People familiar with the matter said he often fields calls from local executives jostling for a plum role, adding to his influence.At the same time, international proposals aren’t getting as much traction at the PIF’s investment committee, according to one person familiar with the matter. Some bankers pitching foreign deals have been told to come up with local ideas and take them to Al Humied, another person said.That inward focus is borne out by the numbers. The fund was the world’s most active sovereign investor last year with a $31.6 billion outlay — 42% of which was spent on local deals. Its two largest deals in the first half of 2024, the $5 billion pledge to BlackRock and a mobile towers merger, were both domestically-focused.
Hits and Misses
It's too early to tell how some of the fund's big local investment plans will pan out, though the PIF has already had successes on a few international deals. Newcastle United is now valued at over ￡1 billion ($1.3 billion), well above what the fund paid for it three years ago. The PIF has also benefited from a rally in global stocks, which helped push annualized returns since 2017 to 8.7%, up from 8% a year earlier. And as evidenced by a recent deal with private equity group Ardian for a stake in Heathrow Airport, the PIF is still investing globally.“This is not a scale back of the interest in overseas investment in absolute dollar amount, nor a reflection of the returns so far from the international side,” said Hasnain Malik, a Dubai-based strategist at Tellimer. “It is more a reflection of Saudi having to drive the initial giga project build out itself.”But the PIF has also had a string of misses on some of its international deals in recent weeks. In August, the fund was forced to hand out another lifeline to Lucid Motors Inc., on top of the billions it’s poured in already. Al Nowaiser is chairman of the electric-car maker’s board.
Since 2023, the PIF has also injected $750 million into Magic Leap, the augmented-reality company which recently warned it would need more funding. It’s among co-investors that lost money on Vista Equity Partners’ acquisition of Pluralsight Inc., and the LIV Golf-PGA Tour merger is currently being investigated by a US senate panel. Many of these deals were done via the international investments division. Yet, for Al Humied's team, the challenge may be even tougher. It's often investing in industries that barely existed in Saudi Arabia before, and has to marry social goals like job creation and economic diversification with also making a profit.“Saudi officials are banking on the idea that good investments for the PIF can simultaneously benefit the local economy,” said Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington. “But it’s not so easy to kill two birds with one stone all the time.”
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