Saudi wealth fund chaired by prince buys $7bn in US stocks, including Starbucks, Zoom, Microsoft, Google, JP Morgan

Middle East Eye
Tue, 16 Aug 2022 13:59 UTC

© AFP

Other shares bought by the fund included Alphabet, the parent company of Google, Adobe and JP Morgan A US Securities and Exchange Commission filing showed that the kingdom's sovereign wealth fund bought 6.3 million shares in Starbucks

Saudi Arabia's Public Investment Fund (PIF), which is chaired by Crown Prince Mohammed bin Salman, has bought $7bn of shares in US companies including Starbucks, Zoom and Microsoft.

The purchases bring the market value of the sovereign wealth fund's investment portfolio to about $40.8bn at the end of the second quarter.

Bloomberg reported that the move echoed the PIF's strategy in early 2020, when the fund spent billions on stakes in US firms whose valuations had been rocked by the coronavirus pandemic.

PIF then sold many of those stakes when markets rebounded, netting the fund a large profit.

A US Securities and Exchange Commission filing showed that the fund bought 6.3 million shares in Starbucks, 4.7 million shares in Zoom and 1.8 million shares in Microsoft.

Other shares bought by the fund included Alphabet, the parent company of Google, Adobe Systems and the bank JP Morgan.

Established in 1971 by King Faisal of Saudi Arabia, the PIF is one of the largest sovereign wealth funds in the world and is estimated to hold assets worth at least $620bn.

The fund is currently pursuing a two-pronged strategy, building an international portfolio of investments while also investing locally in projects that will help to reduce Saudi Arabia's reliance on oil.

Limited information

Last year, court documents filed in Canada confirmed that the PIF was used to purchase a company that owned two private jets that transported the men who killed and dismembered Saudi journalist Jamal Khashoggi in the kingdom's consulate in Istanbul in 2018.

Saudi Arabia has spent billions of dollars, often through the PIF, on investments aimed at bolstering the kingdom's reputation.

The fund's purchase last year of the British football club Newcastle United was criticised by rights as allowing the kingdom to shift attention away from Riyadh's well-documented human rights violations, including its crackdown on internal dissent and its leading role in the war in Yemen.

Most of what is known about the PIF's holdings comes from regulatory filings.

The fund itself discloses limited information publicly about its allocations to different geographies or asset classes, Bloomberg reported.

Comment: Since it's clear that the US economy is tanking, with the CEO of Starbucks recently announcing the closure of numerous stores due to the increased violence staff were having to put up with, one wonders just what the Saudi's are expecting to get on their return? Is it that they foresee a future whereby these companies will once again see a resurgence (whether at home or abroad), or is this some attempt at slowing (or at least seizing a modicum of control over) the collapse of the US economy? And, if the latter, on whose behalf?