PIF and BlackRock chiefs reveal investment targets in Riyadh

LONDON: Saudi Arabia’s Public Investment Fund (PIF) is targeting annual returns of between 3 and 9 percent across its portfolios in the long term, its managing director said on Tuesday.
Yasir Al-Rumayyan was speaking at the opening session of a major conference hosted by the PIF in Riyadh.
Panelists included BlackRock Chairman Larry Fink, IMF Managing Director Christine Lagarde and Victor Chu, CEO of First Eastern Investment Group.
They were quizzed on their outlook for investment returns as individuals and states worldwide grapple with how to ensure sufficient retirement fund during an extended period of low growth across global economies.
Al-Rumayyan said that some assets could reach annual returns in the low teens.
“We don’t want to be a sitting duck to be shot down by only being in conventional investments. We want to go beyond – that is what Vision 2030 is all about.”
He also revealed that he wants the Future Investment Initiative to become an annual event which would help the Kingdom prepare for the future.
BlackRock’s Fink warned: “Long term growth rates are decelerating quite rapidly and this is going to present pension funds with bigger liability issues – but this is also one of the reasons we have to address this issue of retirement today with expected returns — whether it’s 4, 6 or 8 (percent).
“It means you have to put money away sooner to get to the expected pool of money you want in retirement.”
Asked about his own forecasts for what was possible and realistic as an investment return, he said: “The BlackRock Investor Institute came out with a 10-year forecast of 4 percent – with a balanced portfolio. I tend to think it will be closer to 6 percent. We’re in a world of low inflation.”
Dozens of the biggest names in global business have arrived in the Kingdom for the Future Investment Initiative (FII), which is being hosted by the Public Investment Fund (PIF) — the body that is spearheading a slew of economic reforms.
Saudi Arabia is undergoing unprecedented economic and social reforms as the Kingdom seeks to reduce reliance on oil and gas revenues while creating thousands of new jobs for a youthful population.