Over the weekend, Blackstone and the Public Investment Fund of Saudi Arabia signed a new memorandum of understanding which outlined a specific foundation for what could be a new infrastructure which could require an initial $20 billion investment from the PIF at launch. Blackstone says, then, it hopes to raise an additional $20 billion from investors to keep the program running.
More specifically, Blackstone says—if this fund does come to be a reality—it will invest in infrastructure projects with a total estimated value upwards of $100 billion. At first, these investments will come through from the equity of the project with additional debt financing coming into play later. The company also says that the amount it will raise will be roughly equal to what the private equity firm had been able to invest over the last decade and a half.
H. E. Yasir Al Rumayyan is the managing director of the Public Investment Fund of Saudi Arabia. He comments, “This potential investment reflects our positive views around the ambitious infrastructure initiatives being undertaken in the United States as announced by President Trump.” US President Donald Trump had made an official visit to Saudi Arabia over the weekend. Al Rumayyan, who is also the managing director of the of the Public Investment Fund of the Kingdom of Saudi Arabia, goes on to say, “The strategic opportunity for the Public Investment Fund to achieve long-term returns given historical investment shortfalls.”
Blackstone contends that this new fund will help the company to begin addressing some very specific infrastructure improvement needs. After all, the American Society of Civil Engineers recently gave US infrastructure a D+ grade. In addition, the deterioration of the country’s infrastructure has been estimated to cost American families, on average, about $3,400 per household per year.
Blackstone president Hamilton E. James also says, “There is broad agreement that the United States urgently needs to invest in its rapidly aging infrastructure. This will create well-paying American jobs and will lay the foundation for stronger long-term economic growth. Blackstone has the talent, scale and experience to be an effective private sector partner in filling the massive infrastructure funding gap. We thank PIF for its strong endorsement of the United States and its vote of confidence in our country and Blackstone in making this investment.”