C Citigroup Inc

By Rory Jones and Summer Said 

Dubai

In the coronavirus pandemic's financial fallout, Saudi Arabia's $300 billion sovereign-wealth fund has emerged as one of the world's biggest bargain hunters, taking minority stakes worth billions of dollars in American corporations.

The Public Investment Fund in the first quarter bought shares worth about half a billion dollars each in Facebook Inc., Walt Disney Co., Marriott International Inc. and Cisco Systems Inc., according to a U.S. regulatory filing late Friday.

The fund bought financial stocks, investing $522 million in Citigroup Inc. and $488 million in Bank of America Corp., while also spending $714 million on a stake in Boeing Co.

The purchases, reported in a filing with the Securities and Exchange Commission, follow disclosures last month of stakes each worth nearly $500 million in cruise operator Carnival Corp. and concert promoter Live Nation Entertainment Inc.

Crown Prince Mohammed bin Salman, the kingdom's day-to-day ruler, tasked the sovereign-wealth fund in 2015 with diversifying the country's economy away from oil by investing in companies and industries untethered to hydrocarbons.

PIF's recent buying spree highlights a bold strategy of piling into global stocks even as the novel coronavirus and a crash in oil prices mean that Saudi Arabia's financial position is now the most precarious in a decade. The Saudi government this week tripled its value-added tax rate and cut subsidies to state employees as it contends with lower oil revenues and an economy weakening under coronavirus lockdown.

Many of the stocks that PIF has targeted are trading at historic lows, bruised by the fallout from the coronavirus and rock-bottom oil prices that have battered stocks of energy companies this year.

While PIF has dipped into stocks in recent years, the fund has focused more on private equity, allocating capital to managers such as SoftBank Group Corp. Its record is mixed. PIF's $45 billion investment in the Vision Fund has suffered losses and its pre-listing investment in Uber Technologies Inc. of $3.5 billion is currently down 40%.

PIF's recent equity purchases in oil firms also have bucked Prince Mohammed's original mandate for the fund. It set out to invest in non-oil companies that can help establish new industries in technology, tourism and entertainment, or act as a hedge against the decline of oil, the kingdom's biggest asset.

However, The Wall Street Journal last month reported that the fund had bought undisclosed stakes in a bevy of energy firms, including Equinor AS, Royal Dutch Shell PLC, Total SA and Eni SpA.

PIF invested $484 million in Shell, $222 million in Total and previously unreported stakes of $828 million in BP PLC., $481 million in Suncor Energy Inc. and $408 million in Canadian Natural Resources Ltd., according to the U.S. filing.

In the first three months of the year, PIF bought stakes worth $496 million in Disney, $522 million in Facebook, $491 million in Cisco and $514 million in Marriott, the filing shows.

It also purchased shares worth roughly $80 million each in Warren Buffett's Berkshire Hathaway Inc.; chip makers Broadcom Inc. and Qualcomm Inc.; International Business Machines Corp.; drugmaker Pfizer Inc.; Starbucks Corp.; railroad firm Union Pacific Corp.; outsourcer Automatic Data Processing Inc.; and Booking Holdings Inc., the parent company of Booking.com.

On top of the stakes in public companies, PIF also is awaiting regulatory approval for a roughly GBP300 million ($380 million) buyout of U.K. Premier League soccer team Newcastle United F.C.

Write to Rory Jones at rory.jones@wsj.com and Summer Said at summer.said@wsj.com

(END) Dow Jones Newswires

May 16, 2020 09:03 ET (13:03 GMT)

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