RIYADH: The Future Investment Initiative conference is playing a critical role in highlighting Ƶ’s progress toward Vision 2030, according to a partner at the US-based consulting firm Bain & Co.
Speaking to Arab News on the sidelines of the event in Riyadh, Gregory Garnier talked up the role of the Public Investment Fund in diversifying the Kingdom’s economy beyond oil, facilitating strategic investments, and fostering partnerships for green energy initiatives.
Held under the theme “Infinite Horizons: Investing Today, Shaping Tomorrow” from Oct. 29 to 31, FII8 is set to welcome more than 7,000 attendees as it hosts discussions on how investment can serve as a catalyst for a prosperous and sustainable future.
“FII is always a big moment for Bain and for the Kingdom. It’s really the time where we measure the progress of the Kingdom toward the Vision,” Garnier said, adding that “there is no better place to see how the Kingdom is progressing toward the Vision.”
He discussed PIF’s efforts in realizing the intiative’s objectives, underscoring its commitment to diversifying the economy beyond oil. “It really starts from the Vision and starts with a vision, which, of course, we want to develop outside of oil,” he explained.
Garnier elaborated on the necessity for sovereign intervention to catalyze sector growth, but added: “It doesn’t mean that every sector needs to be built by and invested by the sovereign wealth fund.”
Gregory Garnier. AN
Investment strategies are diverse, ranging from joint ventures to foreign investments aimed at localizing supply chains. Garnier pointed to the recent announcement of Alat investing in Lenovo as an example, emphasizing that “it’s a broad investment to bring it back, supply chain manufacturing, and commercial activity in the Kingdom.”
The Bain & Co. partner also stressed the importance of ensuring that investments yield maximum returns, both financially and in terms of positive impacts on the economy.
“It’s not just about buying. It’s also making sure that every dollar you invest has the maximum return, the financial but also an upward impact on job GDP because money is not infinite. So you need to make choices with it,” he added.
Discussing sustainability, Garnier remarked on Ƶ’s commitment to net-zero emissions by 2060, with PIF targeting 2050.
He explained the gradual nature of this transition, stating: “The sovereign wealth fund does have a big role, but it’s not the only one.”
Garnier underlined that reducing consumption is important before making energy use greener, saying: “First, we need to reduce and optimize the consumption of the Kingdom before making it greener, consume less. And there’s been a lot of investment in that space.”
PIF is actively exploring ways to lower carbon emissions across its portfolio, which Garnier described as a necessary investment.
He emphasized Ƶ’s plans to invest in green energy, mentioning that “there’s a huge program by the Kingdom, by the utilities.”
The Bain & Co. partner added: “But we are talking about hundreds of billion dollars to be invested to transition toward a fully green mix, namely hydrogen, solar, wind.”
Highlighting a recent joint venture with TCL, a Chinese manufacturer, Garnier pointed out the focus on local production of green technologies. “It’s not only putting solar panels but also making sure they are also manufactured in the Kingdom,” he said.
He also observed a surge in the activity of Middle Eastern sovereign wealth funds globally, saying: “It’s fair to say the Middle East sovereign wealth funds, and all GCC (Gulf Cooperation Council) countries are very active globally and have become a powerhouse for the financial investor market globally.”
Garnier identified a key trend toward strategic investments and financial diversification, highlighting that “some are strategic, which is investing in a specific company globally because I want this company to play a role in my own country, like in KSA or elsewhere.”
The interview also touched on the burgeoning mergers and acquisitions market, which Garnier described as “growing fast across all asset classes and all types of transactions.”
He highlighted an increased desire for family-owned businesses to exit through various routes, including sales to wealth funds and initial public offerings, adding: “They see the value that injecting new investors allows the companies to grow but also the company to professionalize.”
As the conversation shifted to artificial intelligence, Garnier acknowledged the Middle East’s unique opportunity to lead in this space.
He explained: “The region has capital, and it’s also very energy intensive,” highlighting the potential for the Kingdom to play a pivotal role in the AI ecosystem, from producing semiconductors to running large-scale data centers.
“It’s a fantastic opportunity for the region,” he concluded, emphasizing the Kingdom’s capacity to harness its resources effectively to shape the future of AI.
