Saudi Arabia Plans Its First Sovereign Wealth Fund

(Bloomberg) — Saudi Arabia, the world’s biggest oil producer, plans to start its first sovereign wealth fund with about $6 billion, channeling surplus crude-oil revenue into investments in foreign companies.

“The Ministry of Finance is looking into a new fund,” Muhammad al-Jasser, vice governor of the Saudi Arabian Monetary Agency, said today in an interview at the World Economic Forum in Davos, Switzerland. “It will probably mostly invest in equities.”


Fueled by record oil prices and rising currency reserves, sovereign funds have ballooned to $3.2 trillion in assets, according to analysts at Frankfurt-based Deutsche Bank AG. They estimate the funds will climb to more than $5 trillion in the next five years.

Gulf investors almost doubled their overseas acquisitions to $64 billion last year as oil prices rose to more than $90 a barrel, according to data compiled by Bloomberg. That helped the region’s governments earn more than $1.3 billion a day from crude sales.

Bloomberg