The David Rubenstein Show: Saudi Wealth Fund Head Yasir Al-Rumayyan

some sovereign wealth funds say their goal is to get the highest rate of return what is your overall goal principal goal we need to have higher returns positive economic impact being you know the engine of the economic growth in Saudi now you have said I think publicly you would like it to be the largest sovereign wealth but in the world at some point when do you think you'll be able to get to two trillion dollars it's very much achievable by 2030 early on your tenure I think was a three and a half billion dollar investment in Hoover how does a deal like that come about it came about from an app that I used a new brew it was an amazing hat would you fix your time please well people wouldn't recognize me if my tie was fixable okay just steam it this way all right I don't consider myself a journalist and nobody else would consider myself a journalist I began to take on the life of being an interviewer even though I have a day job running a private equity firm how do you define leadership what is it that makes somebody tick [Music] we're here today with his Excellency Yasser al-rumi on who is both the chairman of Saudi Aramco and also the head of the pif which is the Saudi sovereign wealth fund so you have both jobs how do you allocate your time between running the sovereign wealth fund pif and being the chair of Saudi Aramco doesn't that take you 80 or 100 hours a week to do pif role is an executive role while the Aramco role is chairmanship I don't have the executive chairmanship role so in Aramco I focus on four things basically the strategy the targets the annual targets that we have monitoring of the performance and managing the actual board while in PIR from the governor there although I'm a board member and the pif Board but my role there is totally different it's an executive role and I'm there every day for a long number of hours looking after our investments opportunities I'm looking after our current portfolio companies in August of 2015 you became the head of pif at what time what what size was pif then in terms of the assets under management Pio was totally different than what it is today so in 2015 the board was changed it became turned by the Crown Prince Prince Mohammed bin Salman and these we changed the strategy so the assets under management then was the something like 150 billion dollars today it's over more than 330 325 billion dollars you said that the crown prince appointed you to the position how well did you know the crown prince before he appointed you did he yeah well no actually I didn't know him at all I did not heard of him no I heard of him I received a call before before I took the post there was a CEO of Saudi foreign sea capital and that one state we I turned around this company from a losing company to one of the most profitable companies in Saudi Arabia and the Middle East in investment banking so at one stage we had like 41% of all more investment banking activities so I think the crown prince heard of me and I got the call you got a call to meet with him yes so what was like an interview he just said guess what we picked you and you have to leave your job and it's a great better job but I thought it's gonna be an interview but it was like here's what I want you to do one two three four and this kind of things and even when I said when he told me one can you start I said yeah I need maybe like three months say no it's one month and you will do it and then the next week I got another call saying you have to come immediately so what do you tell your family you've just got a new job or something like that you see it's them we're all very proud to be Saudis and to participate and the change is the positive giant changes that the country is its living and doing right now I mean my wife and my kids my kids were younger then but they all felt maybe this is the right thing to do now you have said I think publicly you would like it to be the largest sovereign wealth fund in the world at some point and you'd like it to get to a trillion dollars two trillion a trillion dollars yes so when do you think you'll be able to get to two trillion dollars the number looks really big because you know the largest sovereign wealth fund today is about one trillion we think that it's very much achievable by 2030 and I will tell you where where the growth will be coming from so number one is the performance and we're doing extremely good performance number two is the assets that we're getting from the government like different companies different would become and also a land bank for the government number three cash injections that will get them from the government and we've been getting some and number four is the recycling of our profits all those different things require a big staff to manage how big is the pif stay after day when we started it was the 40 people today we're more than 700 by year and our target is to have more than 1,000 full-time employees and pif and they will be all in Saudi Arabia the bulk of them would be in Saudi but now we're opening up and the financial capitals of the world so hopefully in the second half of this year we will have our first office it's gonna be in New York and potentially London also will be in the second half we will also considering some coverage in Asia so most likely we're gonna have also an office either in China or Hong Kong or potentially even syncopy some sovereign wealth funds say their goal is to get the highest rate of return whatever they can do legally to get the highest rate of return invest in the country out of the country is your mission to get the highest rate of return or do you want to in fact have certain goals like improving energy diversification in the kingdom or getting people to invest some money in the kingdom what is your overall goal principle goal believe it or not is all the above so we need to have returns economic impact positive economic impact changing the the the diversity or improving the diversity of revenues also being one of the you know the engine of the economic growth in Saudi even we look into renewables and how we lower the the emission and all of these things as I understand our principle goal of the crown prince is to make the kingdom less dependent on oil absolutely so right now I assume a very large part of your budget comes from oil yes it is and you would like to get it down to below 50% or some number do you have currently I mean it's like 70% and the non-oil revenue increased quite tremendously in the past three years or so so eventually we want to be less dependent on oil and the reason being it's the volatility and the oil prices and the last thing we want to have a volatile economy right so the more of non-oil revenue you have in the economy the the better sustainable and less volatile economy you have one of the very visible investments that you made early on your tenure I think was a three and a half billion dollar investment in uber yeah and I you're on the uber board yes how did this deal like that come about did hoover call you up or did you say do you think it's a good opportunity and how the hell does a deal like that come about it came about from an app that I used an uber it was an amazing app and I liked the service in an amazing disrupter they came and provided better service for the same customers for lesser prices so it's just an amazing combination and made some formula so there was one of the uber executives visiting the country and he was visiting me for something else and I knew about the uber I asked him more about it and I said yes we consider in capital race and I asked the team to look into it they loved it it went through the whole governance structure that we have and we have layers and layers of you know investment diligence and what have you and we came to our investment committee than to the board they all loved it and we decided to be so do you use uber yourself when you're in the United States or in the kingdom I used to use it yes a lot and they must know who you are when you show up maybe they do yeah I think so another very visible investment that you made was a very large investment I think about forty five billion dollars into the so-called first vision fun yes and so what brought that about and are you happy with that investment the alignment of the thinking that's what brought it so I remember sitting down with the crown prince number of times trying to strategize and what is it exactly that we would like to be invested in of course it's the future so we said artificial intelligence robotics Internet of Things so these were the main themes that we would like to be n remember 70% of our population is under the age of 30 so we need to have something sustainable for them and longer-term and when I met with Matheson for the first time he was talking about the this the exact same things that we were looking for so the alignments of the thinking is what drove us to have this mega partnership with software so today you're happy with the investment it's it's up so far after like two and a half years about nine and a half billion dollars so it's fine so after you made a 45 billion dollar commitment did you get a lot of people saying well if you have 45 billion for him what about 45 billion for me did you get a lot of those people calling you up not that all people came in with a 45 billion dhanno proposition bike though we we have access to everyone you are the chairman as we talked earlier about Saudi Aramco which is the largest publicly traded company in the world and also the largest oil company in the world is that right absolutely it's the largest company from different levels market cap the profits that will generate and is second to none let me ask you about another job you have you are the chairman as we talked earlier about Saudi Aramco which is the largest publicly traded company in the world and also the largest oil company in the world is that right absolutely it's the largest company from different levels market cap the profits that we've generated is second to none and the IPO that we had was the largest IPO and the world okay so you went public not too long ago at the Iowa should buy roughly one point eight trillion dollars something like that it was the valuation was the one point seven and now I twins about the two trillion for a couple of weeks and now it's about one point eight eight trillion today so no company is as valuable as that company nob but it's traded on the local stock exchange the exact extent yes and have you thought about listing it in New York or London or Tokyo or other places yet remember we only offered the 2% of the company so it's still 98 percent of the company owned by the shareholder which is the government of Saudi Arabia so and our program is to have multiple number of listings over the years so we we're looking into it to have more offerings and these offerings could continue to be in Saudi and if we have any good stock exchange that we think can bring some value investors to us we will definitely consider it now many organizations now saying they want to be carbon neutral by a certain period of time because carbon contributes to global climate activity yeah what is the position in cat in Saudi Arabia do you want to be carbon neutral by a certain period of time if possible Saudi Aramco been working in their mission for decades now so we have one of the largest if not the largest production but at the same time we have as a country and as a company one of the lowest emission for a good reason we started early on to have more efficient we have been working and rohnke for the best eighty-four years the concession that we have from the government today is about sixty years unlike most of the other pro language companies their concessions is between five to ten years so whenever we go to a site to our will we we want to make sure that this well is big enough to produce more and at the same time our depletion rate of these worlds is very small so some of the worlds that we had 86 years ago or 84 years ago still up to date operational however having said that oil is very much important it's the cheapest the fossil fuel generally it's the cheapest energy source today you have over a billion people in the world don't have access to electricity so you have to cater for those people and that's why we think we be we should be more efficient but at the same time we shouldn't forget who we are what we do so historically Saudi Arabia was the biggest producer of oil in the world you know I think maybe the United States might be or maybe Russia is bigger but Saudi Arabia could produce more oil given all the reserves you have but if you're quite comfortable at the level that you're producing is that around 9 or 10 million barrels a day it's it's about the 10 billion dollars a day so it's often said in the oil world that Saudi has the cheapest or Louis lifting cost which means that you can extract oil more cheaply anybody else because it's either right close to the surface or things related to that is that more like you it's it's less than $4 $3 right while the other companies cost is between 20 to 50 dollars so in terms of Saudi Aramco what are the biggest challenges you've faced as chairman there was getting the IPO done I guess was the biggest I've been a board member in Aramco for the best five years almost then I was part of the IPO of committee and things were not going as I thought it should be gone so I had a number of discussions with the committee members and I told them we have to do it this way and I had some discussions with the government and the crown brands and after a while I was appointed as the chairman of that committee the Ibo committee and it was last summer and we said we have to get the IPO done before the end of 2019 we got it done that was a huge challenge the valuation was amazing the demand that we got was really great almost five times the demand the offer size so that was the initial challenge what would you like people to know about Saudi Arabia Saudi Arabia is progressing every day and the progress that we have we are witnessing is amazing welcome to Riyadh welcome to the future investment initiative 2019 in recent years you've instituted a conference in Riyadh which is an annual event not unlike Davos or the Milken conference where it's gathering of the elites of the investment world and they come but at a conference that you sponsor why do you do that conference you're going to continue to do that we will definitely going to continue to do it in fact now the conference is transformed into an institution so now it's the FII FII institution and we've done it for the third year in a row and we'll continue on doing it every year and it's gonna be all grantee conference now the crown prince announced a project I assume that you're investing in which to build a new city yes and is that something you're involved with as well or some of the people you've invested with or involved with it's part of pif portfolio companies MPI F we have six different pools of investments one of these pools is the Giga projects and neon is on top of these Jirga projects we have another three Giga projects the Red Sea and Judea and also Amala in addition to the other pool of the real estate and infrastructure people who have never been to Saudi Arabia you would say that what they should know about Saudi Arabia that they might not know is what that it's different than they might think the image of Saudi Arabia may be different than they think what would you like people to know about Saudi Arabia Saudi Arabia is progressing every day and the progress that we have we are witnessing is amazing we're opening up for tourism the tourism sites and in Saudi Arabia it's like one of the best in the world my last vacation with the family we were like debating between skiing or doing something else and we ended up and Ola during the holidays and it was just an amazing location when you're the head of your family and you want to go a certain place you say I'm the head of Saudi Aramco I'm the head of and wishes where we're gonna go or do the children get the vote that doesn't work with my wife Angela doesn't work a desert so today Saudi Arabia is a kingdom there's a king and the crown prince and a royal family just as there are in some other countries so with Saudi Arabia governed any much differently than other countries in the Gulf or something or different if you look at the the Middle East and if you look at the award actually we have the same system since 1930s when the new the third Saudi Kingdom came into existence the good thing about regime that we have in Saudi it's progressing and developing over years and that's why we have reform after reform the latest reforms that we have are really good it started in the economic and social and now it's going to the security and political reform so it's the same it's the same system that has been there for the best 89 years so today if you were looking at the future of Saudi Arabia you would like it to be much less dependent on oil in 20 or 30 years than it is today I assume is that right yes and your other goals are to make Saudi Arabia goals as a citizen of Saudi Arabia's to make it more comparable to other Western countries in terms of the business community we would open up sound diversify - oh absolutely we're opening up the Saudi economy and the Saudis open for business okay so you're the chairman of Saudi Aramco that must take some time and yes and then you're the chief executive of the pif that takes some time but you must have a little time for one of your hobbies which is golf yeah you're also the chairman of the national golf sanity golf enter a Saudi golf generation so are there a lot of golf courses in Saudi Arabia not yet we have like four or five of them the grass golf courses but historically speaking Aramco had about I don't know maybe 14 to 20 desert golf courses actually golf started in the kingdom long ago in the thirties when Arrancar started and most of the you know the American engineers who came in they started playing golf and it was just in the desert I assume that sand traps were big it wasn't hard to get saying I know I'm really good in bunkers I can't get the full so now you are a 12 handicap golfer about yes but you're gonna get to scratch or I don't I don't think I have the time to dentists credits but you've played in major tournaments yeah we had the second Saudi international tournament which is part of the European PGA - right last year we had four out of the top five players in the world this year we had also a three out of the top five players in the world next month we're gonna have the first lady's European tour in March and in Jeddah and it's gonna be an amazing experience for us so if you're playing you're you know the head of the Saudi or chairman of Saudi Aramco you're the head of PIF when you're you have a putt of it's three or four feet so they just say they give it to you or they actually make you putt it out no comments okay so by my standards you're a teenager you're very young so you're a lot more energy than presumably I have but are you happy with these jobs and you're gonna keep doing them for the foreseeable future you're not going to say I'm out of here in a year or two or five years or something you're you love what you're doing presumably and I'm so excited about this stuff and it's it's the good thing about it it's the impact that you're creating and the impact that will create and not only in Saudi Arabia but the region and the old work

Channel: David Rubenstein

Views: 489,904

Keywords: finance, news, Bloomberg, saudi arabia, saudi aramco, saudi oil, david rubenstein show

Id: bUcyQGOzG3s

Length: 24min 1sec (1441 seconds)

Published: Tue Mar 10 2020