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Saudi fund adds Disney, Facebook to entertainment stocks

Saudi Arabia’s acquisitive sovereign-wealth fund added investments in leisure and media giants including the Walt Disney Company, Facebook and Marriott International in the first financial quarter of 2020, according to newly revealed US regulatory filings.

According to the Financial Times, the Public Investment Fund (PIF) – which made headlines last month after buying half a billion dollars’ worth of Live Nation shares – spent nearly US$8bn on US and European blue-chip stocks in the first three months of the year, as the Gulf kingdom seeks to benefit from low prices on stock markets spooked by the coronavirus pandemic.

The Live Nation share purchase, along with an earlier buy of Carnival Cruise Line stocks, were picked up by industry and financial press at the time, as the value of the deals (relative to the size of the companies) required that the US Securities and Exchange Commission (SEC) be notified.

However, the earlier purchases were also sizeable: Among the PIF’s pre-Live Nation investments are a $827.8m stake in BP, a $713.6m stake in Boeing and smaller investments in Bank of America, Citigroup, Starbucks and drugmaker Pfizer, reports the FT.

IF says it is “identifying opportunities to invest in solid companies with strong, long-term outlooks”

The stakes in Disney and Facebook are valued at $496m and $523m, respectively, SEC filings reveal.

The fund has also been linked with Warner Music Group in recent weeks.

A senior Saudi official told the FT in April that the kingdom had set up a dedicated team to look at the “midterm and long-term, downside and upside” of the global economic crisis caused by governments’ response to the spread of Covid-19.

The PIF says it is “identifying opportunities to invest in solid companies with strong, long-term outlooks who we expect will be sector leaders when global economic activity begins to approach pre-pandemic levels”.

Other sovereign funds in the oil-rich Middle East, including Abu Dhabi’s Mubadala, and the Qatar Investment Authority, are also seeking investment opportunities, the paper reports.


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Saudi government takes $500m Live Nation stake

The Public Investment Fund (PIF), the sovereign wealth fund of the kingdom of Saudi Arabia, has taken a 5.7% stake in Live Nation.

According to a document filed today (27 April) with the US Securities and Exchange Commission (SEC), the PIF has bought 12,337,569 shares – valued at just shy of US$500 million at the time of writing – in the world’s largest live entertainment company.

The fund is now reportedly Live Nation’s third-largest shareholder, with Liberty Media still No1 and investment company Vanguard Group second.

Live Nation’s share price rose above $40 for only the third time this month following the SEC disclosure, continuing a rally that began in late March following a sharp fall after its shows were postponed or cancelled globally.

The investment in Live Nation is the latest in the live sector for rapidly liberalising Saudi Arabia, which is pushing hard to grow its domestic events market in order to reduce its reliance on oil revenues.

PIF bought 12,337,569 shares, valued at just shy of US$500 million

Speaking after a BTS show last October, Live Nation Middle East’s president, James Craven, celebrated the growth of live entertainment in Saudi Arabia, saying: “Two years ago, no one would have ever expected us to bring in international touring artists into Saudi.

“I want the people in the industry to come and see the changes, come and see what’s happening and meet the people.”

Following the debut of Jeddah World Fest, the country’s first-ever popular music festival, two months earlier, organiser Robert Quirke was similarly full of praise for the transformation, telling IQ: “There is absolutely no doubt that this is a turning point in Saudi youth culture and live entertainment. The future is incredibly bright and full of hope for the new generation.”

Earlier this month, PIF governor Yassir al-Rumayyan revealed the fund is looking into investment opportunities in “areas such as aviation, oil and gas, and entertainment”, according to Reuters. Saudi Arabia took a stake in Carnival cruise lines shortly before.


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