Saudi Arabia's PIF commits $500m to China-Russia fund

The commitment – which will bring the total size of the fund to $2.5 billion – comes as Saudi Arabia faces widespread condemnation over the killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul. Kirill Dmitriev (pictured, left, with Mohammed bin Salman, Saudi Arabia's crown prince), CEO of RDIF, was one of the speakers at last week's Future Investment Initiative in Riyadh, an event that was avoided by numerous international business leaders.

"These agreements with our partners take RCIF to a new global level − three sovereign wealth funds are joining forces to jointly implement investment projects. This trilateral venture will not only unify their expertise in Europe, Asia and the Middle East, but will also allow the fund's portfolio companies to receive support in several key markets at once," said Dmitriev in a statement. He added that negotiations are ongoing with other partners about the possibility of joining the fund.

CIC and RDIF each committed $1 billion to RCIF on its establishment. An additional $2 billion was expected to be raised from international institutional investors. The fund allocates 70% of its capital to Russia and former Soviet countries, with the remaining 30% invested in China.

More than 25 projects have been backed by the fund in areas such as forestry, infrastructure, consumer, financial services, and technology. Recent China-based investments include SoYoung, an online marketplace focusing on cosmetic surgery, and Megvii Technology, a facial recognition software developer. Another portfolio company, B2B steel trading platform Zhaogang, filed for a Hong Kong IPO in June.

Last year, the Chinese and Russian governments agreed to invest about $10.5 billion in two cross-border development funds as part of the One Belt One Road (OBOR) initiative. The program entailed the creation of the RMB68 billion ($10 billion) China-Russia RMB Investment Cooperation Fund (CRRICF) and a commitment to deploy $500 million from RCIF.

PIF was established in 1971 but its mandate was widened to include non-Saudi Arabian companies as recently as 2014. Its new mandate is to support efforts to diversify the domestic economy and nurture new sources of growth. Notably, PIF committed $45 billion to the $93 billion first close of the SoftBank Vision Fund and $20 billion to a $40 billion infrastructure fund launched by The Blackstone Group.

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• Topics
• Greater China
• Europe
• MENA
• Fundraising
• Growth
• China
• Russia
• Public Investment Fund