Behind this week’s jaw-dropping news that the PGA Tour wants to merge with a Saudi upstart rival called LIV Golf is the organization behind the deal with billions of dollars. , that is, there was a Saudi sovereign wealth fund.
The fund has long been a giant in the financial world, but the deal, which surprised the golf world, shed Krieg’s light on the Saudi company, which has been described as: One of the most opaque things in the world.
Here’s what you need to know about the Saudi fund.
What is the Saudi Government Fund?
known as public investment fundor PIF, is an investment pool that manages over $700 billion in Saudi government funds.
Ostensibly for the benefit of the Saudi economy, they invest those funds in domestic and foreign companies, real estate and other businesses to generate profits.
Established by Royal Decree in 1971, the Foundation is headquartered in Riyadh, Saudi Arabia, with offices in Hong Kong, London and New York. The PIF has grown rapidly in recent years, funding ambitious tourism and commercial ventures dubbed ‘Gigaprojects’.
How do Saudi funds rank globally?
It’s not the biggest in the world. It belongs to Norway and is said to currently manage $1.4 trillion. Sovereign Wealth Fund Institute.
Who runs the Saudi fund?
The PIF is led by Gov. Yasir Al Rumayyan, a former banker and chairman of state oil company Saudi Aramco. He also hosts the ‘Davos Conference in the Desert’, an annual conference in Riyadh.
But the real power behind the purse strings, analysts say, is Saudi Arabia’s de facto leader, Crown Prince Mohammed bin Salman, who chairs the public investment fund board.
Prince Mohammed has made the fund a cornerstone of his economic growth plan, Vision 2030, which aims to provide a blueprint for Saudi Arabia to move away from its dependence on oil resources and expand its economy into technology, healthcare and other sectors. It is a photo.
The plan aims to give women new freedoms while creating private sector jobs for many of Saudi’s youth. The 37-year-old crown prince also set a goal of increasing the assets of the Public Investment Fund to $3 trillion by 2030.
What are the fund’s investments?
Under Prince Mohammed’s reign, the fund has invested in a range of international companies, including Uber, private equity firm Blackstone, Japanese conglomerate SoftBank, English Premier League football team and sports franchises such as Newcastle United. .
We are supporting a futuristic city in the desert of Saudi Arabia. Neomannounced a new airline Riyadh Air this year, which has purchased 72 Boeing Dreamliners, saying it will commit to a “green” strategy.
The Public Investment Fund announced Tuesday that LIV Golf will merge with European golf circuits PGA Tour and DP World Tour in hopes of creating a global giant in the sport.
How was the reaction?
The word “shock” is thrown around a lot.
First, some key figures were removed from confidential negotiations. Golf fans never expected it to come.
But many Saudi officials were ecstatic, thinking it was a story that countered the tide of negative press. “I’m not going to lie. This is a moment that many of us enjoy,” Saudi businessman and royal family member Prince Talal Al-Faisal said in an interview.
When the Sovereign Wealth Fund-funded LIV Tour launches in 2021, it marks a sharp break from golf’s traditional conventions and quickly divides the world of men’s professional golf in two.
It was a breakaway league and was seen as a threat to the PGA Tour. It lured golf stars like Phil Mickelson (reportedly worth $200 million) to frontmen. The PGA Tour tried to catch up by increasing prize money.
Big stars like Tiger Woods have spoken harshly about the new league and Greg Norman, who has become the western face of LIV as commissioner. LIV plucked some of the most widely known players from his established PGA Tour, and the PGA kicked them out.
How did the deal come about?
The secret meeting was perhaps sweetened by the promised riches.
Al Rumayyan, an aide to Prince Mohammed, has spearheaded talks over the past month and a half with PGA Tour commissioner Jay Monahan.
“I know people will call me a hypocrite,” Monahan said after the announcement. “But things change.”
But what about resentment and controversy?
The new league, the sovereign wealth fund, the Saudi government and the royal family have all been tainted by scandals at some point.
The birth of LIV sparked a lawsuit with the PGA Tour, the latter of which came under intense scrutiny from DOJ antitrust agents investigating whether the Tour’s efforts to thwart LIV had damaged the golf job market. .
Saudi investment funds have raised eyebrows by entrusting billions of dollars to former Trump administration officials, including an investment firm run by Jared Kushner, the son-in-law of former President Donald J. Trump. The other is run by former Treasury Secretary Steven Mnuchin.
Invested in Russian infrastructure. Turkish security officials also say he is accused of being involved in the purchase of a plane to transport the murderer of Saudi dissident author Jamal Khashoggi to Turkey, where he was killed and his body was found. It is said to have been cut into pieces. A US intelligence report said the Saudi crown prince had authorized the assassination.
The Saudi government has detained a woman who campaigned for freedom to drive and detained members of the royal family, what critics see as a consolidation and dismantling of power. Saudi Arabia has also played a proxy role in devastating conflicts in places like Yemen, where the Saudi-led coalition has been fighting Iran-backed Houthi rebels since 2015.
what happened now?
Experts say the deal, if realized, could change the game of golf as we know it.
Most of the terms of the deal have not been disclosed, and the deal may not yet go through under intense scrutiny from international regulators and the PGA Tour board, which requires approval.
Under the deal announced Tuesday, lawsuits between former rivals will disappear like golf balls in tall grass. The fate of the antitrust investigation is less clear.
Al Rumayyan plans to head the new for-profit board of directors. (He previously served on the boards of Uber and SoftBank Group.)
In an interview with Saudi Arabia’s podcast Socrates last year, Al-Rumayyan expressed his love for golf, stating that “golf is a really fun sport and one of the best,” the crown prince to the Public Investment Fund. celebrated the goals of .
“We have a complete plan for 2030, first how we get to 1 trillion and then how we get to 2-3 trillion,” he said. Stated. “Prince Claims $3 Trillion.”
Christian Coates Ulrichsen, a Middle East researcher at Rice University’s Baker Institute for Public Policy, said Prince Mohammed’s deal was “very strategic.” He said the plan “reaches beyond the Belt and Road into parts of Central America and is seriously engaged with them to tell the story of a changing Saudi Arabia.”
What’s your message? he said. “This is not the Saudi Arabia you thought you knew based on 911, Khashoggi and Yemen.”