Saudi Arabia's wealth fund nearly triples US stock investments to more than $43bn

Saudi Arabia's sovereign wealth fund nearly tripled its holdings of US stocks to more than $43 billion in the third quarter, investing in a variety of companies from e-commerce and FinTech to biotechnology and fuel cell-powered commercial vehicles.

The Public Investment Fund, which manages more than $430bn in assets, increased its investments in US equities from about $15.94bn in the second quarter this year, according to a Securities and Exchange Commission filing.

The fund's investment in electric car company Lucid, which went public in July, is worth about $26bn. The fund had invested more than $1bn in the company in 2018 for a major stake. It currently owns about 63 per cent of the company. The PIF retained its 72.8 million shares in Uber, which were worth about $3.26bn at the end of the third quarter.

The fund bought about 3.56 million shares in image sharing and social media company Pinterest valued at about $182 million and shares in FinTech company PayPal worth $174m.

It also snapped up 1.6 million shares in Visa, the world's second-largest card payment company, valued at $358m, as well as shares in Chinese e-commerce company Alibaba worth about $100m and shares in Walmart valued at $231m.

The sovereign wealth fund lies at the centre of the kingdom's Vision 2030 plan to diversify the Arab world's largest economy and reduce its reliance on oil. Under a five-year strategy that was announced in January, the PIF aims to more than double the value of its assets under management to $1.07 trillion and to commit $40bn annually to develop Saudi Arabia's economy until 2025.

The fund created 10 new sectors, set up over 30 new companies, created 331,000 jobs in Saudi Arabia and tripled assets under management to about $400bn over the past four years. Under its five-year strategy, it will focus on 13 sectors as part of its core domestic strategy.

Other third-quarter investments include e-commerce company Shopify, online food order and delivery service Just Eat Takeaway and Ballard Power Systems, a company that specialises in fuel cells for buses.

The fund also invested in Hyzon Motors, a supplier of zero-emission hydrogen fuel cell-powered commercial vehicles, including heavy-duty lorries and buses. It bought about $55.7m worth of shares in the company.

Other investments include Air Products & Chemicals, Avery Dennison, FedEx, online luxury fashion retail platform Farfetch, BeiGene, a biotechnology company that specialises in the development of drugs for cancer treatment and Plug Power a company that develops hydrogen fuel cell systems.

The PIF also invested in Prologis, a property investment trust that invests in logistics infrastructure and Pinduoduo, the largest agriculture-focused technology platform in China that connects farmers and distributors with consumers directly.

The fund retained its share position in MultiPlan Corporation, a healthcare management software company. The value of the investment in Live Nation Entertainment, the world’s largest live entertainment company, increased 4 per cent in the quarter to $1.14bn.

It retained its shares South Korean e-commerce company Coupang, which is backed by Japan's SoftBank. The PIF is an anchor investor of the SoftBank Vision Fund.

The latest regulatory filing also shows the fund maintained its 50.8 million shares in US cruise line operator Carnival Corporation, which was affected by the coronavirus crisis, but has since rebounded with widespread vaccinations. The value of its stake slipped about 5 per cent from the last quarter to $1.27bn.

The PIF's US equity portfolio includes 32 companies as of the third quarter.