Saudi invests in Softbank fund

Saudi Arabia’s recent commitment to invest in the SoftBank Venture Fund is further proof of its determination to have Vision 2030 succeed.
In October 2016, SoftBank announced plans to form a technology investment fund worth as much as $100 billion, the SoftBank Vision Fund.
The fund will invest in various technology ventures in the coming years. Over the next five years, Softbank and Saudi Arabia have committed to contributing $25 billion and $45 billion, respectively, comprising 70 per cent of the total capital committed. Saudi Arabia’s investment will be made through its sovereign wealth fund, the Public Investment Fund (PIF).
This is the same fund in which Saudi Arabia will contribute its national oil company Saudi Aramco, the same oil company that Saudi Arabia plans to list on global markets via an initial public offering (IPO) in 2018. The PIF, and in turn, the SoftBank Vision Fund, is now central to Saudi Arabia’s plans to diversify its economy beyond oil.
It’s important to note that this commitment is to be fulfilled over the next five years.  Yet it’s also important to realize that the capital for this investment has to come from the IPO and subsequent stock sales of Saudi Aramco. With oil still mired in the $50-60/barrel range, the country’s soaring budget deficits have forced the government to spend down its considerable foreign reserves.
Deficits of $98 billion in 2015 and $87 billion in 2016 have reduced the country’s foreign reserves from $730 billion at the end of 2014 to approximately $560 billion as of July 2016.
[Seeking Alpha]

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