The sovereign wealth funds of Saudi Arabia and Bahrain have penned a Memorandum of Understanding (MoU) to amplify cooperation and investment across pivotal sectors.
This pact is designed to broaden collaborative efforts and pave the way for new and lucrative investment ventures in Bahrain, as announced by the Public Investment Fund (PIF) of Saudi Arabia and Mumtalakat, the investment arm of Bahrain.
According to PIF, the MoU ushers in investment prospects that will not only bolster the fund’s financial interests in Bahrain but also create supplementary opportunities for the private sector within both nations.
“The MoU with Bahrain’s Mumtalakat signifies an impactful stride toward fostering joint investment initiatives across various sectors in Bahrain. It aligns with PIF’s strategy of cultivating enduring strategic partnerships in the region that confer added economic value,” stated Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF.
The agreement is anticipated to yield sustainable profits that will augment PIF’s assets under management while further diversifying the economy in sync with the objectives of Saudi Arabia’s Vision 2030.
As part of the agreement, PIF seeks to escalate its investments in Bahrain’s strategic sectors, while Mumtalakat is keen to discover attractive investment opportunities that could foster cooperation and partnership with PIF.
Following the signing of the MoU, the Saudi-Bahraini Investment Company, an extension of the Saudi wealth fund, has been established with a commitment to invest up to $5 billion across various sectors in Bahrain.
PIF has been instrumental in supporting neighbouring states, including direct investments and financial assistance, as a member of GCC state investors. The fund, valued at $700 billion, has been identified as the world’s most active sovereign investor, with deal activity surging to a historic high of $31.6 billion, as per data from research consultancy Global SWF.
With plans to boost its capital allocation to $70 billion annually after 2025, PIF is currently investing between $40 billion and $50 billion each year as part of its strategy. The fund is diversifying its portfolio across a myriad of industries, supporting Saudi Arabia’s Vision 2030 plan for economic diversification.
PIF’s investment portfolio includes stakes in tech giants, sports franchises, electric vehicle manufacturers, and groundbreaking developments such as the $500 billion NEOM City and the Red Sea Development Company’s expansive tourism project.