Saudi Arabia pledges $20 billion to Blackstone for American infrastructure

Blackstone is managed by President Trump's long-time friend and advisor Steve Schwarzman, chair of Trump's Strategic and Policy Forum.

Blackstone Group LP says that it is teaming up with the Public Investment Fund of Saudi Arabia to help launch the new infrastructure investment vehicle. Blackstone and PIF are still negotiating terms of the arrangement.

Blackstone, which has invested $40bn in infrastructure over the past 15 years, said it expects to invest $100bn in infrastructure in the future through the use of debt financing.

The announcement of the deal came ahead of President Trump's visit to Saudi Arabia over the weekend.

Lockheed Martin has since announced, among other deals, a US$6 billion commitment to building 150 Black Hawk helicopters in the kingdom. This collaboration between PIF and Blackstone is the culmination of a year's discussions between the two institutions, which began in May 2016.

EQT Partners in February finished raising 4 billion euros ($4.2 billion), nearly 40 percent more than targeted, after less than six months for its third infrastructure fund.

PIF agreed to commit $20 billion to the pool, and Blackstone plans to raise the same amount from other investors, the New York-based asset manager said in a statement Saturday.

"This will create well-paying American jobs and will lay the foundation for stronger long-term economic growth", Blackstone president Hamilton James said. He has pledged to jumpstart public and private investment in the area.

There is likely to be a significant requirement beyond the PIF commitment to USA infrastructure; however, as Blackstone noted, there are estimates of an infrastructure funding gap in the U.S. alone of up to US$2trn - some 100 times the size of the PIF's commitment through the MOU.

  • Zachary Reyes