(Bloomberg) -- Saudi Arabia’s sovereign wealth fund has started approaching banks for its first-ever loan, aiming to establish a group of banks with which it will work on future deals, according to people familiar with the matter.
The Public Investment Fund, or PIF, has asked lenders to participate in a multi-billion dollar loan, the people said, asking not to be identified as the information is private. Lenders that participate in the deal will form the core banking group for the PIF, which has ambitions of becoming the world’s largest sovereign fund, the people said.
A spokesman for the PIF declined to comment.
The PIF is willing to borrow as it seeks to diversify the kingdom’s oil-dependent economy and boost returns from investments, Managing Director Yasir Al-Rumayyan said in a Bloomberg Television interview in October. The fund could raise about $5 billion from banks this year, people familiar with its thinking told Bloomberg in January.
The fund hired former Bank of America Merrill Lynch Managing Director Alireza Zaimi as head of corporate finance and treasury last year, to work on its borrowing plans.
PIF is a central part of the government’s effort to diversify the economy away from oil, under a plan known as Vision 2030. The fund aims to control more than $2 trillion by 2030 and currently has assets of about $230 billion. That makes it around one quarter of the size of Norway’s sovereign wealth fund, currently the world’s largest. PIF has already committed $65 billion to funds managed by Blackstone Group LP and SoftBank Group Corp.
©2018 Bloomberg L.P.