Saudi pension fund eyes real estate investments

08 May 2014   Category: News, Global, Middle East, MENA   By Daniel Shane

Saudi Arabia’s second-largest pension fund, the Public Pension Agency (PPA), is planning on boosting its investment in real estate projects, according to its governor.

The fund, which has about 1.1 million members across the Gulf kingdom, currently allocates around a third of its investment into the domestic equities, 12% into property, as well as a sizeable amount into fixed income, according to Reuters.

It currently pays out about 4 billion Saudi riyals (US$1.1 billion) to members every month, Governor Mohammad Al Kharashi told the news agency.

"We are open for more investments in real estate. We are open for any good investment opportunity," Mr. Al Kharashi said.

He added that the PPA would continue to support the kingdom’s local equities market, including in sectors such as petrochemicals, cement and banking. "We are a long-term strategic investor and we look at these investments as attractive for us,” Mr. Al Kharashi said.

Mr. Al Kharashi also said that the PPA was not currently under any pressure to divest any of its assets for payouts to its members.

His comments come shortly after Saudi Arabia’s chief legislative body, the Shoura Council, suggested raising the retirement age for workers in the public sector, where most Saudis are employed, from 60 to 62 years old.

The PPA does not disclose the total size of its assets, but according to its most recent annual report published in May last year, its domestic equities holdings reached 41.8 billion riyals in 2012.