First: PIF Program - Description and Ambition

In order to realize the Kingdom of Saudi Arabia’s Vision 2030, the Council of
Economic and Development Affairs (CEDA) launched, on April 24, 2017, twelve
programs covering the period from 2018 through 2020. Among these programs
is the PIF Program, which draws its objectives from the Vision’s goal towards a
thriving economy. The PIF Program is defined as follows:

The Program strengthens the Public Investment Fund, which is the
engine behind economic diversity in the KSA. It also develops high
focused strategic sectors by growing and maximizing the impact of the
Fund’s investments, and seeks to make PIF among the largest sovereign
wealth funds in the world. Moreover, the Program establishes strong
economic partnerships that help deepen the KSA’s impact and role both
regionally and globally.

Second: Objectives and Key Performance Indicators

Vision 2030 identified 96 strategic objectives across its three pillars. Of these,
four objectives pertaining to the Vision’s second pillar—a thriving economy—are
directly assigned to the PIF Program.

Objective 1: Grow the assets of the Public Investment Fund.
PIF Program aims to grow the Fund into one of the world’s largest sovereign
wealth funds. In fact, PIF’s assets have already increased to SAR 840 billion*
(as of September 30, 2017) from SAR 570 billion* (as of December 31, 2015),
reflecting its new direction to maximize value of under-utilized government assets
and increase value of investments. Moving forward, the Program’s initiatives are
expected to increase PIF’s assets to SAR 1.5 trillion by 2020; these assets are
expected to generate between 4% and 5% in average annual total shareholder
returns over that period. Those returns take into account new assets, which PIF
will be investing in, that will generate returns beyond 2020 and over the medium
to long term. 

Objective 2: Unlock new sectors through the Public Investment Fund.
The PIF Program will be an important catalyst for the Kingdom’s economic
transformation and for the launch and development of new sectors, including
(but are not limited to) industrial and manufacturing, entertainment, and
waste management. To achieve these objectives, the Program will create new
companies, create new ecosystems, and develop large-scale infrastructure
and real estate projects. By doing so, the new domestic assets are expected
to reach 20% of total PIF assets under management by 2020 and contribute
SAR 30 billion to the GDP (in real terms) by then.

Objective 3: Build strategic economic partnerships through the Public Investment
Fund.
The PIF Program aims to develop PIF’s assets in international markets as well as
grow its role both regionally and globally. PIF will benefit from its scale to become
the preferred and most impactful partner globally. Through the Program, PIF’s
international assets are expected to reach 25% of its assets under management
by 2020. Moreover, in its pursuit of these partnerships, the Program is expected
to contribute to attracting SAR 20 billion in foreign direct investments (cumulative
2018-2020).

Objective 4: Localize cutting-edge technology and knowledge through the Public
Investment Fund.
PIF seeks to support the localization of technology and know-how through the
launch of new sectors, as well as through the strategic partnerships it forms
with global partners. Moreover, PIF will, as an active investor, stimulate and
encourage its portfolio companies in Saudi Arabia to expand their research and
development efforts. In this context, the Program aims to create 11,000 highskilled jobs locally by 2020. Moreover, it expects to invest SAR 210 billion -
both directly and through its portfolio companies - over the coming three years
in advanced technology sectors and research and development, locally and
internationally.
In order to measure the performance and impact of the PIF Program, a number
of Key Performance Indicators (KPIs) were identified. These include KPIs
that measure progress against the four PIF Program objectives, as well as
macroeconomic indicators. The 2020 targets for these KPIs are set based on
the PIF program’s models and projections.