BLACKSTONE AND THE PUBLIC INVESTMENT FUND OF SAUDI ARABIA SIGN DEFINITIVE DOCUMENTATION ON PIF ANCHOR CONTRIBUTION TO BLACKSTONE INFRASTRUCTURE BUSINESS
● Vehicle Will Invest in Enhancement of United States Infrastructure Assets
Riyadh, 25 October, 2017 - Blackstone and the Public Investment Fund (“PIF”) of Saudi Arabia today at the Future Investment Initiative (“FII”) in Riyadh signed definitive documentation in relation to a new Blackstone business primarily dedicated to investing in U.S. infrastructure with an anchor commitment of up to $20 billion by PIF. Blackstone anticipates that the program will have $40 billion in total equity commitments in a permanent capital vehicle, including $20 billion to be raised from other investors.
Through the equity in this vehicle and additional debt financing, Blackstone expects to invest in more than $100 billion of infrastructure projects, principally in the United States.
Stephen A. Schwarzman, Chairman, CEO, and Co-Founder of Blackstone, said: “PIF’s investment will play a critical role in helping the United States rebuild its aging infrastructure and create new, well-paying jobs across our country. There is broad, bi-partisan agreement on the urgent need to fill America’s multi-trillion infrastructure funding gap and we are grateful for PIF’s exceptional partnership in this effort.”
Speaking at the signing, H.E. Yasir Al Rumayyan, Managing Director of PIF, said: “Our anchor role in what is anticipated to be one of the world’s largest dedicated infrastructure programs reflects the scale of our ambition and the efforts we are undertaking to ensure sectoral and geographical portfolio diversification. We are delighted to cement our partnership with Blackstone in this endeavor, and look forward to commencing investment activities in the wide-ranging US infrastructure opportunities.”
Across its investment strategies, infrastructure investing has been one of Blackstone's most successful and active areas. The firm has invested in more than $40 billion of infrastructure-related projects globally over the last 15 years. This vehicle launches a new business for Blackstone with PIF as a strategic partner.
This partnership will help the United States address its significant need for infrastructure improvement. United States infrastructure is graded D+ by the American Society of Civil Engineers (ASCE), and the deteriorated state of its infrastructure is estimated to cost each American family $3,400 per year. Independent estimates put the country’s infrastructure funding gap at up to $2 trillion, requiring significant domestic and international private sector investment. Infrastructure investment plans currently under consideration at the Federal level in the United States are expected to create as many as 15 million jobs, while also enhancing America's economic growth, productivity, and global competitiveness.