Saudi Arabia is a major player in global capital markets through the Saudi Arabian Monetary Authority and the Public Investment Fund. But in 2009, the Saudi government unveiled two new SWFs that attracted quite a bit of media attention:
1) Hassana Investment Company: This fund was given the official go-ahead in March of 2009. Its mandate was to invest pension fund assets in global stock markets. Indeed, according to reports, it was to manage the assets of the General Organization for Social Insurance.
2) Sanabil al-Saudia: This fund was announced in July 2008 and supposedly launched its operation in May of 2009 with an initial capitalization of $5.3 billion. According to reports, it was to be a portfolio manager for the Public Investment Fund and have a global mandate across a broad range of asset classes. The idea was that it would begin making investments by the end of 2009.
Well, we’re now half way through 2010, and I can’t find a single press report about either of these two funds from the past year. And a thorough sleuthing of GOSI’s website, which was ostensibly the “owner” of Hassana, shows nothing at all about the new SWF. Likewise, I can’t seem to find anything about Sanabil on the Ministry of Finance’s website or on the sub-pages on the Public Investment Fund. In fact, Sanabil Al-Saudia does not even feature among the PIF’s “fully owned companies” listed on the website.
So what happened? Well, I had a conversation yesterday with someone who knows the Saudi Arabian landscape extremely well. And, according to this individual, the two funds have indeed been created. And the money has indeed been allocated. The problem is that the Saudi Arabian authorities can’t seem to decide what it is they want to do with these new funds. In the words of this individual, “They’re stuck.”
I think “stuck” is a pretty appropriate way to describe these funds, as we really haven’t heard a peep out of them since they were unveiled! The real question then is when the Hassana Investment Company and Sanabil al-Saudia will make a public appearance.