Saudi Arabia’s Wealth Fund Planning Health-Care Investments

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund is planning investments in the kingdom’s private health-care services and hospitals as it seeks to modernize domestic infrastructure, people familiar with the matter said.

The Public Investment Fund may appoint an adviser in the near future to help identify investment opportunities, the people said, asking not to be identified as the deliberations are private. The plan may require billions of dollars, though no final decisions have been made, they said. It could involve investments in existing health-care companies or partnering with foreign companies looking to establish operations in the kingdom, the people said.

“The Public Investment Fund regularly explores potential investment opportunities to support portfolio diversification efforts, but does not comment on specific discussions or activities,” a spokesman for the fund said.

Turning Saudi Arabia into a regional center for health care is one of the objectives outlined in PIF’s 2020 strategy document, published last year. That includes plans to establish "medical cities" and develop a local pharmaceutical and medical devices industry to reduce the kingdom’s reliance on imports.

PIF isn’t the only government-controlled fund planning to invest in the sector. Hassana Investment Co. is partnering with London-listed NMC Health Plc to invest as much as 6 billion riyals ($1.6 billion) in the kingdom’s health-care industry, they said last month.

The health plan reflects one aspect of PIF’s role in the kingdom’s efforts to diversify away from oil and transform its economy. The wealth fund is also taking stakes in firms such as Tesla Inc. and Uber Technologies Inc., and has made an initial $45 billion commitment to SoftBank Group Corp.’s behemoth Vision Fund.

In addition to its headline-grabbing investments around the globe, the kingdom’s wealth fund holds about $133 billion of assets in its own publicly traded companies, including stakes in Saudi Basic Industries Corp., Saudi Telecom Co. and National Commercial Bank.

PIF is set to raise about $70 billion from a planned sale of a stake in chemical producer Sabic to Saudi Arabian Oil Co., another state-controlled entity. But the investment group has also been grappling with the controversy around the killing of Saudi critic Jamal Khashoggi, which caused prominent bankers and businessmen to pull out of PIF’s forum this year.

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