Saudi Arabia’s public investment fund just reshaped professional golf with the PGA Tour-LIV merger. It’s just the beginning

New York
CNN

Saudi Arabia’s mountain of cash has risen to the world of professional golf. But that’s just a tiny sliver of the cash it’s sinking into a number of high-profile companies elsewhere in the world as the kingdom seeks to diversify away from dependence on oil revenue. and as the petro-empire tries to achieve its political goals.

The Saudi Public Investment Fund is a government-controlled fund with $650 billion in assets under management, according to its latest filing. It aims to cross $1 trillion within a few years. A state-owned investment fund like PIF is not unique. It is only the seventh largest in the world, according to the Sovereign Wealth Fund Institute.

Some of them are pension funds for the country’s citizens or public employees, while others, like the PIF, act like a private sector investment firm, trying to make money through a diversified investment portfolio.

But Saudi Arabia’s funds differ from private investment firms in that, with the country facing widespread condemnation for its human rights record, its investments in sports and other entertainment companies can be seen as an attempt to burnish that tarnished reputation.

Creating PIF files LIV Golf a year agoThe $2 billion cost lured many of the sport’s top players away from the U.S. PGA Tour and Europe’s DP World Tour by offering big dollar prizes. That led to a year-long a legitimate fight that banned LIV golfers from established journeys and brought some unwanted attention to the human rights situation in Saudi Arabia. Critics of LIV Golf accused the Saudis of backing the new tour as a sporting smear.

The legal battles, acrimony and competition for top golfers between LIV and the PGA and DP World Tour came to an abrupt end on Tuesday with the announcement that the three form a combined for-profit company. PIF plans to make undisclosed additional investments in the whole.

The chairman of the new golf series will be the chairman of the state-owned oil company Saudi Aramco, Yasir Al-Rumayyan, who also controls the English national football team. Newcastle United and is a PIF governor himself.

The Saudis have also thrown big dollars at some of the world’s most famous footballers, luring legends such as Cristiano Ronaldo and Karim Benzema to play in the Saudi Pro League.

According to Al-Rumayyan, investment in sports is not vanity.

This all makes financial sense to us. We don’t want to subsidize things, he said in an interview with CNBC on Tuesday when announcing the deal with the PGA.

But whether the Saudis’ investments were driven by a desire to win or good publicity, it’s clear that professional sports aren’t the only place where the Saudis are flexing their financial means.

For example, according to its most recent filing, it has a combined $7.5 billion in investments in several leading video game companies, giving it a 9 percent stake in Electronic Arts.

(EA)With a 7% share of Take-Two Interactive and almost 5% of Activision Blizzard

(ATV). It also owns more than 5% of Live Nation

(LIE)Concert promoter and owner of Ticketmaster and major stake worth hundreds of millions in cruise ship operator Carnival Corp.

(CCL)., Uber

(UBER) and Zoom

(ZM).

Its largest US investment is in emerging electric vehicle maker Lucid

(LCDX). PIF owns 60 percent of Lucid

(LCDX)s stock worth $7.6 billion at Tuesday’s close. Clear

(LCDX) recently, PIF announced that it would invest another $1.8 billion in the company to fund its operations.

In 2018, when Elon Musk thought take a Tesla

(TSLA) private, he searched PIF financingwho already had a stake in Tesla

(TSLA) at that time. It no longer lists Tesla

(TSLA) as one of its holdings. But last year it helped Musk with his $44 billion purchase of Twitter agreeing to transfer its current $1.9 billion investment in the social media platform to the new company controlled by Musk.

Not all PIF investments have been made public. For example, it is not clear how much it invested in launching LIV Golf. And The Washington Post has reported that it has invested $2 billion in a private equity firm founded by Jared Kushner, Donald Trump’s son-in-law, shortly after Kushner leaves the White House in January 2021. CNN has not been able to confirm this report, but it is known that LIV Golf tournaments have been held by the Trump Organization in real estate.

Many of these investments, including the creation of LIV Golf, have sparked controversy.

serves as the chairman of PIF Mohammed bin Salman, Crown Prince of Saudi Arabia. Bin Salman is the man named by a US intelligence report as responsible for approving the operation that led to the operation. 2018 murder of journalist Jamal Khashoggi. Bin Salman has denied his involvement in Khashoggi’s murder.

In addition, the US State Department says the Kingdom’s dismal human rights record includes restrictions on freedom of expression, torture, political prisoners and enforced disappearances.

And relatives of some of the victims of the Sept. 11 terrorist attacks denied news of the LIV-PGA deal Tuesday. Some have accused the Saudi government of complicity in these attacks. Fifteen of the 19 al-Qaeda terrorists who hijacked the four planes were Saudi citizens, but the Saudi government has denied any involvement in the attacks. The Congressional 9/11 Commission said in 2004 that it had found no evidence that al-Qaeda was individually funded by the Saudi government as an institution or by senior Saudi officials.

CNN’s Coy Wire, Jack Bantock and Steve Almasy contributed to this report