Who are Saudi PIF’s GPs?
Saudi Arabia’s Public Investment Fund isn’t exactly known for its transparency when it comes to private equity fund commitment disclosures. Surprising, then, that the sovereign wealth fund has disclosed a list of venture capital, growth and buyout managers whose funds it has committed capital to. You can find a list of the 57 managers here, which includes some of the biggest brand name firms in private equity, on the website of Sanabil Investments, its investment arm. The website also notes that it does consult with advisers when it comes to selecting prospective fund managers, though it does not engage placement agents.

The disclosure is interesting for three reasons:

• PIF is the world’s sixth-largest sovereign fund with around $607 billion in assets, according to data from the Sovereign Wealth Fund Institute, so a giant when it comes to potential LP capital.
• Data on which firms PIF has fund relationships with is typically difficult to come by. Until now, the number of managers it has relationships with and the breadth of those relationships (the website discloses some notable Chinese GPs, for example) has been largely kept under wraps.
• The ethics of accepting LP capital from the Kingdom has come under the microscope in recent years, notably with the killing of dissident journalist Jamal Khashoggi in 2018 in which crown prince, Mohammed bin Salman, was alleged to have been involved. At the time of Khashoggi’s disappearance, when Blackstone was raising its $40 billion Infrastructure Partners fund with a $20 billion anchor commitment from PIF, president and chief operating officer Jonathan Gray said the firm had been “concerned” about what it had been reading the last couple weeks, adding: “That said, we take a long-term approach both to our relationships and to building businesses.”

FAO: the European Commission
A consortium of 13 industry bodies has penned a joint statement to the European Commission in response to its Foreign Subsidies Regulation, which came into force in January, and the subsequent draft implementing regulation, whose consultation period ended last month. The regulation would generate “unintended consequences and create a disproportionate burden for EU and non-EU businesses with a global presence”, the group writes.

The FSR is designed to combat competition-related issues caused by foreign subsidies in the EU’s internal market. Side Letter attended a call on Tuesday led by Invest Europe, which outlined some a few key issues. In a word map generated from responses during the consultation period, three of the most prominent phrases were “excessive”, “burden” and “very concerned”.

Kaarli Eichhorn, vice-chairman of American Chamber of Commerce to the EU, noted on the call that the consortium does not disagree with the FSR as a concept, though the regulation raises “very serious questions”. “It’s an honest assessment by businesses that this will not only be very difficult, but potentially even impossible… The data that is being requested here in the context of the FSR… simply does not exist in corporate organisations today.”

The consortium presented four main demands of the European Commission: to narrow the scope of reporting obligation; exempt the disclosure of classified information; allow all relevant parties to supply information directly to the commission; and provide clarity on some key concepts, which many respondents note are too vague. Should these requirements not be met, the letter argues, the FSR could be deeply damaging to the European investment landscape.

“Does [the regulation] mean that investors would look at other regions of the world for investment? One could not exclude that if the cost of making an acquisition in Europe becomes increasingly burdensome and there are a plethora of acquisition target cells within the world, maybe that would be a calculation to be done,” Eichhorn said.

Essentials