Saudi Arabia's Public Investment Fund invests billions of dollars in Boeing, Disney and Facebook shares

Saudi Arabia's sovereign wealth fund has invested billions of dollars in stake purchases in major US companies in sectors spanning from aerospace to entertainment that include Boeing, Disney and Facebook, according to a filing to the US Securities and Exchange Commission (SEC).

The Public Investment Fund (PIF) said it bought a $713.7 million stake in Boeing, $495.8m holding in Disney and $521.9m in Facebook stock in the first quarter of 2020, according to a May 15 quarterly disclosure on the SEC.

The sovereign wealth fund also disclosed an $827.7m investment in British oil giant BP via American Depository Receipts (ADRs) listed in the US, $487.6m in Bank of America and $522m in Citigroup.

The fund, which manages about $320bn of assets, has previously and picked up stakes in Uber Technologies, Tesla and SoftBank Group's Vision Fund to expand its global portfolio.

PIF began snapping up more minority stakes in international companies during the first three months of the year as the coronavirus pandemic disrupted global business, sunk stock prices and forced companies to sell debt. The investment in some of the biggest names of the US corporate world is a bet that they have the potential to generate returns in the long-term and drive Saudi Arabia's economic growth.

“PIF is a patient investor with a long-term horizon. As such, we actively seek strategic opportunities both in Saudi Arabia and globally that have strong potential to generate significant long-term returns while further benefitting the people of Saudi Arabia and driving the country’s economic growth. These opportunities include sectors and companies that are well positioned to drive economies and lead sectors moving forward,” PIF said in an emailed statement.

Other holdings disclosed by the fund on Friday include $513.9m in Marriott International and $78.4m in Warren Buffett’s Berkshire Hathaway.

It also accumulated shares in energy players Suncor Energy, Canadian Natural Resources, France's Total and Royal Dutch Shell.

Last month, the PIF purchased an 8.2 per cent stake in US cruise liner operator Carnival Corporation, which has been hit by the coronavirus crisis, sending its shares surging at least 20 per cent higher.

Saudi Arabia's PIF is pursuing a strategy of broadening its global portfolio while also investing in key domestic projects as part of wider economic diversification plans to reduce the country's reliance on oil revenues.

Speaking at a Future Investment Initiative Institute virtual event in April, PIF's governor, Yasir Al-Rumayyan, said the fund was looking into investment opportunities in areas such as aviation, energy, and entertainment, adding that there would be a lot of potential for investment opportunities once economies start to reopen.

"You don’t want to waste a crisis from the opportunities. For us, we’re looking into any opportunities," Mr Al-Rumayyan said. "If you look at different sectors like airlines, oil and gas, entertainment – they’re all put on hold with the stoppage of the economy. We think once the economy is opening up, I think we will see a lot of returns."

The PIF's investments in technology are "doing extremely well" as the use of tech technology has helped some sectors to flourish during the pandemic though it cannot help companies such as cruise-liners or airlines, he said.

The coronavirus pandemic has disrupted daily life, paralysed air travel, wiped out at least $17 trillion from stock markets globally and forced governments to introduce economic stimulus packages worth more than $8tn as countries went into lockdown.

The International Monetary Fund said it expected the global economy to shrink 3 per cent in 2020, a sharp fall from its earlier forecast of 3.3 per cent growth. Lower oil prices also mean Middle East and Central Asia economies were projected to contract 2.8 per cent this year.

Globally, the number of Covid-19 cases has risen to more than 4.5 million while the death toll exceeded 308,000, according to the Johns Hopkins University, which tracks the spread of the virus. Some 1.6 million people have recovered.

– With assistance from Michael Fahy.