This is my kitchen table and also my filing system. Over much of the past three decades, I've been an investor. The highest calling of mankind, I've often thought, was private equity. And then I started interviewing. While I watch your interviews, Coach, I know how to do something. I've learned in doing my interviews how leaders make it to the top. I asked him how much he wanted. He said, 250. I said, Fine. I didn't negotiate with him. I didn't do due diligence. I have something I'd like to sell. And how they stay there. You don't feel inadequate now because being only the second wealthiest man in the world, is that right?
One of the most influential investors in the world is Yasir Al-Rumayyan. He's the head of the PIF, the Saudi sovereign wealth fund, and also the head of Saudi Aramco. I had a chance to sit down with him to talk about how he looks at the investment world and how he looks at the opportunities to invest in Saudi Arabia. I was home all day yesterday preparing for this interview. And I assume you were preparing for it. And then I watched television and I saw President Trump and you at the tennis matches. So you weren't preparing for this interview so much as I was.
Right. It was, I think, part of the preparation.
Okay. So for those people that aren't familiar with the PIF, when was the PIF really started? When it was just started?
It started when I was one year old, 1971, and it did so many great developmental projects in the Kingdom of Saudi Arabia. When the Crown Prince became the chairman of the Board of PIF back in 2015, there was a good reason for him to say, I want to be the chairman because he saw the potential and he saw what a sovereign wealth fund like PIF can do to the economy of the Kingdom of Saudi Arabia. What PIF had accomplished up to 2015 was good. It wasn't great. The strategy that we discussed at the board level for about six months or so was so ambitious and wanted to put PIF and the Kingdom of Saudi Arabia on the map of the world when it comes to economic development and investments. So I'll just give you an example. Up to 2015, from 1971, our average IRR was less than 2%. Once we started with the new strategy and up to date, on average, we were making about 7.2%. Now, in the coming two months or so, we will set the new strategy for PIF, which is a continuation from the original one until 2030, and from 2030 all the way to 2040 and beyond.
Okay. So is that what the size is of the PIF now, what the assets under management is?
I didn't check the Wall Street today, and I think our size is roughly, it's 925, 930 at some stage. It was like 945. Our target for the end of the year is 1.075 trillion.
Right. So that's the biggest sovereign wealth fund in the world.
I assume we will be the biggest sovereign wealth fund. Our targets by 2030 is to be at least 2 trillion. And there's a good chance for us to be $3 trillion.
Okay. So no pressure on you, right? So today, how big a team do you have to invest this money? You've got $945 billion under management, so you must have a pretty big team. Is it a team of all Saudis? Is the office only in Riyadh? Where are the people and where? How many people do you have?
Yeah. So back in 2015, we had about 30 people and it's a very small office. Today we have our main office in Riyadh. We have 2,964 people working at the PIF today. So that's a huge growth multiple from where we were back in 2015. We have offices internationally. The first office was in New York City, then we opened the second one in London, then Hong Kong, then Paris, Beijing. And we have regional offices in Cairo and Amman, Jordan, and Manama, Bahrain, and also in Muscat, Oman.
How about Washington, DC?
We're always here. I mean, we have some of our subsidiaries like Sanabil and they have an office in San Francisco, so they're closer to the VC and technology kind of investment.
So when you are running a fund with $945 billion, you must be very popular, right? I mean, people, you must start. Can you ever go to a restaurant or a dinner or any place and people don't say, I've got the greatest investment idea of all time?
That's the story of my life. Right.
Okay. And so how many of them turn out to be great ideas?
I mean, we have a really good filtration process. We have a lot of teams that work on different things, and we're more proactive rather than reactive. So in our five-year strategy, usually we put, and by the way, we left our card for our current strategy, which started from January 2021, and it should take us to the end of 2025. We put there are 13 different sectors that we're interested in, both domestically and internationally. So that's the first filtration. Then we go to the idea itself. Does it make sense to us? Is it a brownfield, greenfield? Is it a financial asset? Because remember, we do too many things and we don't look into only one kind of assets. We look at different asset classes.
So for people who wonder how you get to be the head of a sovereign wealth fund of $945 billion, what were you doing before you had this position? So back in 2015, it was $150 billion. So the amount of growth that we had was really unprecedented. And it wasn't only performance, of course, it was transfer of assets, transfer of cash. And also our performance and the debt raising that we have. So I used to be a CEO of an investment bank called Samba Financial Capital. So we were doing like 40% of all investment banking activities in the Middle East. I started there in 2010 till 2015, and before that I worked for the government at the Capital Markets Authority, which is the equivalent of the SEC. And before that, I worked as a stockbroker in the global markets for about eight years. And before that, which is the very important part of my career, was internal audit and external audit. So I went to, I remember back in my twenties, which was two years ago, I started in the internal audit. So I went from the mail room to the rest of the barrack men to the Treasury, to the corporate bank and to the branches counting money, everything. So I had a really great understanding of how banks and operations work.
And so you're a native of Saudi Arabia?
And you went to King Faisal University. Okay. And what did you study there?
I studied accounting, and then I had the Saudi organization certified public accountant.
When the Crown Prince asked you to head up the fund, how did you know the Crown Prince very well before?
Oh, no. It was the first time I met him when I got the call and say, okay, I got married. And I remember like, you know, he said, when, and it wasn't an interview, actually. He was like, I want you to do this one, two, or three. And it wasn't for the sovereign wealth fund, it wasn't for PIF, actually, it was for the so-called Decision Support Centre at the Royal Court. And the idea that he had, he's a great visionary and none of the things that we're seeing right now in Saudi would have happened without a visionary and a leader like the Crown Prince. The way he's looking at things, it's not based only on opinion. He said most of the governments, especially the Saudi government back then, used to make their decisions based on different advisors and based on opinions. What he wanted to add on top of that is the evidence-based kind of decision making process. So my first task was to build the centre. The centre now has about 350 professionals in social security, politics and economy, and it's an integral part of the decision making process within the center of government in Saudi Arabia.
Okay. So when you're looking at investment, people looking in investment, is the rate of return the most important thing or is it whether it will help the kingdom in some other way, or is it just diversified out of the oil area? What are you most focused on in terms of looking at a good investment?
It's like a number of things. It's a matrix. Returns is very important, but why are we doing certain investment in certain sectors? Is there a GDP contribution? Is there job creation? Is there a help in our local content, which is very important? How can we diversify from oil? I'll just give an example. Back in 2015, the Saudi GDP was about 90% based on oil. Today it's 53% based on non-oil GDP, which is a great growth. Today, the Saudi economy is about 1.1 trillion, grew from about less than 600 billion back in 2016. This growth is coming mainly from the non-oil GDP. So the way we look at investments is to take all these boxes that I mentioned earlier and at the same time, it has to be lucrative. Now, all of our asset classes, like, you know, financial assets, would be the easiest thing to pick, right? Going to public markets or debt capital markets and pick these investments will be the easiest thing. You know, the financial returns are coming with certain high degree of certainty. But what is their impact? Are you an impactful investor? And that's part of our vision and mission within PIF to be an impactful investor. And what's the definition of that? It's to make money, of course, to help and the prosperity and achieving the Vision 2030's major KPIs and to develop the country. Saudi Arabia had so many gaps in many things prior to 2015. And what we wanted to do is basically bridge these gaps. So right now Saudi Arabia has roughly 250 billion barrels of oil reserves proven. Probably there's more. So it's one of the largest, if not the largest in the world.
Why not just make your economy just complete the oil base for the next 20, 30, 40 years, not worry about the future generations, because in our lifetimes you have enough more oil money to just live off the oil money. Why are you diversifying?
If you remember, like if you look into history, Venezuela was at some stage one of the richest countries in the world with all the gold that they have from everywhere in the world. And that's like a disease. And that's why the Crown Prince always talk about we have the oil disease. We cannot live only on oil because this will make you more dormant, less active, because you know that there is always an oil coming out of the ground and you'll sell it. That's one. Two, we have growth in population. So no matter how big is your oil, you need to find new jobs for new people coming in. And today, 75% of Saudis are under the age of 35. You need to educate them. You need to give them the quality of life that they deserve and you need to find them jobs. So you cannot do this only with one source of income, which is oil. And now, of course, the gas is becoming a big thing for us in Aramco, but still not enough. We need to diversify our economy. We cannot just rely on one commodity and say this is enough for us. History repeats itself. We don't want to do the same mistakes that great nations have done.
And so you have a certain goal that by a certain year you want to get certain percentage of your economy to come from non-oil assets.
Actually, we achieved the targets of 2030. Now, as I said, 53% is coming non-oil, but that will never stop us because remember, we want to grow fossil fuel, oil and gas. And at the same time, you have to grow the other non-volume kind of GDP.
Now for most people, being the chairman of PIF would be a full-time job. But you're also the chairman of Saudi Aramco. Does that not take a lot of time as well?
It does. But I'm the governor of PIF. The chairman is the Crown Prince. So but as the chairman of Aramco, it's one of like delights for me because it's a great company. It's not, people when they see Aramco, they see only oil and maybe gas, but it's more than oil and gas company. The Aramco is one of the largest investors in technologies, and that's part of the reason why Aramco has the lowest lifting cost in the world. And it's not because of the demography only, but it's because of the technology that we have. It's about 90 years old. It was a combination of knowledge from the US and Saudi. We have one of the largest numbers of PhDs and CFOs working in Aramco. So it's very well organized. My role as a chairman is to do the following. One is the strategy, two is the monitoring of the implementation of the strategy. And three, to manage the board to make sure that all board members have the opportunity to voice their views and at the same time to make sure that the executive management have all the time to explain why they're doing the things that they're doing or propose them.
Okay. So for those who aren't familiar with oil production, lifting cost is the cost that it takes to get the oil out of the ground per barrel of oil. And I think yours is public information. What yours is is roughly $3.5 a barrel.
Yeah. And if we increase our production because Aramco today only from oil, we have 12 million barrels as the maximum sustainable capacity for our oil, we are producing below 10 million. So we can increase it by additional 20% well within days. And in order for us to do so, we have to continuously do further exploration. So why our lifting cost is lower than the others because of the use of technology. Especially, at some stage, Aramco had the fourth most powerful supercomputer in the world. Just to put things in perspective, it was more powerful than NASA's supercomputer. So there is a good reason for us to invest and deploy more money and investments in technology. And now we are one of the most influential advisors to improve the position of drilling in the oil without disrupting the environment and at the same time lowering our cost.
So if your lifting cost is three and a half dollars a barrel, in the United States to get oil out of the ground, probably is three or four times as high. So that's one of the advantages you have. But you are not even looking for more oil now, I guess, because you already have 250 billion barrels of proven reserves or you're not exploring for more oil now because you don't need to. Is that right?
No, not really. We keep on. We always looking for more. Yeah, we always look for more. And why are we doing it? We find a lot of gas. So today, although I said that our maximum spare capacity is about 12 million, but if you add on top of it the gas, this will give us about 16 million barrels of equivalent oil. So with both the gas and oil, so yes, of course, we would like to explore more and get more. Again, to put it in perspective, our gas today or by 2030 will be larger than a company like Exxon, which is like one of the largest companies. That's only from the gas. If you put all the IOCs, the independent oil and gas companies together, today they are less in production, less in revenue, and less in net income.
If we want to compete in the oil and gas world, you're known as the chairman of the head of Saudi Aramco. And in the financial world, you're known as the head of PIF. But in the sports world, you're known as the person who helped finance LIV. What does LIV actually stand for?
LIV is 50 and IV is four, which is 54. And I don't know how many people now understand the golf terminology, but it's 18 holes and the perfect score, theoretically, is 54 strokes. So that's why we said we want to get the golf to the next level, which is 54 strokes. And by the way, I have announced now back when we started LIV Golf, and I said any one of LIV Golf players can achieve that. And by the way, the lowest score historically in golf, not only LIV Golf, is 58. And Bryson did it the other day with 58. Anyone who can get to 54 strokes as a score can earn a check of $54 million.
You will pay somebody who gets a 54. So 54 score, $54 million?
Is there a big risk that's going to happen or you think or?
I hope, you know, it's going to be one of my happiest days if we achieve that. Because I will go back to my insurance company and ask them to pay for it.
So now there's been discussion for a while about LIV merging with PGA. And you're one of the linchpins of figuring out, is that going to, you're going to announce today what's going to happen or LIV golf?
If you think about it, we have about 110 million golfers around the world. The fan base of the sport of golf is mainly golfers. We have like zero spectators coming in to events or watching broadcast for golf. And that's one of the very few sports in the world that has this kind of status. What I want is to bring golf to them non-golfers just like football, just like tennis, I mean, or Formula One. How many people do you know that have driven a Formula One car? But at the same time, you have millions of people who are watching Formula One. I want to have the same thing for golf. So I'm looking forward for the day to work with the PGA Tour, the DP World Tour. We reached out to them from day one and fortunately things didn't go very well. But I think hopefully in the future we will be able to bring the game of golf together. And this will, I mean, what I'm trying to do is not to claw back from the PGA or the DP World Tour. What I'm trying to do is to increase the size of the pie.
