Would-be Newcastle United chairman Yasir Al-Rumayyan has given an insight as to why the Saudi Arabian Public Investment Fund (PIF) have been so aggressive during the Coronavirus pandemic.
Since the beginning of the pandemic, the PIF been very active on the stock market – particularly in the US. They have bought significant stakes in companies such as LiveNation, Disney, Boeing, Facebook, Carnival and BP.
Al-Rumayyan, who is poised to become the chairman of Newcastle United when the takeover goes through, says that the pandemic has brought about an opportunity – and the PIF didn’t want to waste it.
“To start with, this is a health crisis and the economic crisis is a result of this health crisis,” said Al-Rumayyan.
“I think that’s the dilemma because in an economic crisis, you know exactly what you’re up against but, here, the uncertainty that we have from the health crisis is a big challenge so that’s the first thing that has been alerted to us.
“But for the economy, if you look at the intervention of the governments, especially the US government and the rest of the governments from China, the UK, Saudi Arabia, most of the other G20 countries, it was really unprecedented because if you want to compare what is happening right now from the government stimulus, the physical stimulus and the quantitative easing is really coming in big and it came in early on.
“I think the difference between this time and the 2008 financial crisis was that we have determined what is the problem and we are trying to fix it so we are going to fix the core of the problem rather than the result of it and that is what is different from 2008.
“We have seen the global markets all over rebound. It went down by about 27 or 28 per cent and today if you look at this, it’s down by 12 – 14%, which is something really great. But the only difference that I see and hear is that the bond market, or the credit market, is not reacting as the equity market, which is another thing that’s alerted us so we’re really not sure if this is the bottom of it or not.
“Going back to your question, when you said if this crisis was an opportunity, I think 60% of people said yes, we can use this crisis to make it an opportunity so you don’t want to waste a crisis from the opportunities so, for us, definitely, we’re looking into any opportunities.
“If you look at different sectors, like airlines, oil and gas, entertainment, they’re all button-holed with the stoppage of the economy so we think once the economy opens up, we will see a lot of returns.
“I think if you look at the progression of this pandemic, you have three main things to look at: the short-term, the medium-term and the long-term.
“In the short-term, I think the governments are trying to flatten the curve so we need to contain and control the infection. In the medium-term, we need to reopen the economies and in the longer-term, I think the impact is really great on societies, on economies and on the policies and the politics.”
It’s the mark of a shrewd business organisation to turn a global crisis into your own gain – regardless of what you make of the moral side of doing so. The PIF have been incredibly aggressive and Newcastle United are just one small cog in the machine that is the PIF’s Vision 2030 plan.
Al-Rumayyan will become our chairman when this takeover goes through, so it’s interesting to see him speaking – even if it doesn’t necessarily directly correlate to us. It lets us gain a little bit of insight into his character and how he operates as a businessman. From what I read there, I’m quite impressed.