Saudi Arabia’s sovereign wealth fund has made a fortune on Lucid Motors — but missed out on another windfall by selling Tesla stock

Lucid Air ADAS_1
A Lucid Motors vehicle.

  • Saudi Arabia’s Lucid Motors stake is more valuable than the rest of its US stocks combined.
  • The country’s Public Investment Fund owns Lucid shares worth about $46 billion today.
  • PIF sold a stake in Tesla that that would have been worth up to $50 billion earlier this month.

Saudi Arabia has made a fortune on Lucid Motors this year, but it missed out on a second windfall by selling Tesla stock.

The country’s Public Investment Fund (PIF) disclosed a $26 billion stake in Lucid in its third-quarter portfolio update on Monday. PIF listed the holding in its US stock portfolio for the first time because the electric-vehicle startup went public in July.

The addition of Lucid was almost entirely responsible for PIF’s portfolio nearly tripling in value to $43 billion in the third quarter. Moreover, Lucid accounted for 59% of that figure at the end of September.

Lucid’s stock price has surged by more than 75% since then, lifting the value of PIF’s stake to about $46 billion today — close to the entire value of its portfolio at the close of the third quarter.

PIF invested $1.3 billion in Lucid about three years ago, when the startup was running short of money. It still owns 63% of the startup following its public debut, SEC filings show

While PIF’s bet on Lucid has paid off handsomely, it left a fortune on the table by selling the automaker’s biggest rival. The sovereign wealth fund bought a split-adjusted 41 million shares of Elon Musk’s Tesla in the fourth quarter of 2018, but disposed of the entire holding by the end of March last year — when the company’s valuation was about a tenth of its current level.

The fund’s Tesla stake would have been worth about $42 billion today, and more than $50 billion when the stock peaked earlier this month. In other words, it could have made several times its money if it had waited longer to sell.

PIF — which holds billion-dollar stakes in Uber, Activision Blizzard, and Electronic Arts — aggressively expanded its portfolio last quarter. It invested in Alibaba, PayPal, Pinterest, Shopify, Walmart, and other stocks, boosting its total number of holdings from 13 to 32.

Lucid went public via a reverse merger with Churchill Capital IV, a special-purpose acquisition company (SPAC). Churchill is run by Michael Klein, a former Citi banker who has advised Warren Buffett on several deals over the years.

The automaker generated only $700,000 in revenue and registered a net loss of $1.5 billion in the nine months to September 30, its third-quarter earnings showed this week. On the other hand, Lucid has received more than 17,000 reservations, racked up $1.3 billion in estimated bookings, and had $4.8 billion of cash available at the last count.

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The world’s largest sovereign wealth fund generated returns of $111 billion in the first half of 2021 as the stock market hit record highs

Nicolai Tangen, CEO of the Norges Bank Investment Management, in London, Britain, March 26, 2020.
Nicolai Tangen, CEO of the Norges Bank Investment Management.

  • The largest sovereign wealth fund in the world generated a 9.4% return – translating to $111 billion – in the first half of the year.
  • The Oslo-based $1.4 trillion sovereign wealth fund saw a 13.7% return on equities.
  • Among the fund’s largest holdings are mega-cap tech firms like Apple, Microsoft, Alphabet, Amazon, and Facebook.
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The largest sovereign wealth fund in the world generated a 9.4% return – translating to $111 billion – in the first half of the year thanks to a soaring stock market driven by technology, finance, and energy shares.

Norway’s Norges Bank Investment Management from January to June 2021 surpassed the fund’s benchmark index by 28 basis points, the bank announced on Wednesday.

The Oslo-based $1.4 trillion sovereign wealth fund saw a 13.7% return on equities and a 2.0% slide in fixed income.

Among the fund’s largest holdings are US mega-cap technology companies including Apple, Microsoft, Alphabet, Amazon, and Facebook.

The fund’s returns from investments in non-listed renewable energy infrastructure slipped 1.9%.

“The equity investments had the most positive contribution to the return in the first half of the year, and especially the investments within the sectors of energy and finance,” CEO Nicolai Tangen said in a statement.

Tangen, a former hedge-fund manager who has been in the post for nearly a year, has pointed to inflation as the biggest threat to the fund’s returns, Bloomberg reported, especially amid a potentially overheating US economy.

The fund, created in 1990, invested in renewable infrastructure for the first time this year, a significant step from its previous portfolio which consisted only of stocks, bonds, and real estate.

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Court docs reveal Saudi wealth fund courted by Hollywood and Wall Street owned planes used in Jamal Khashoggi’s killing

Saudi Arabia Mohammed bin Salman protest
A demonstrator dressed as Saudi Arabian Crown Prince Mohammed bin Salman at a protest outside the Saudi Embassy in Washington, DC, October 8, 2018.

  • The Public Investment Fund of Saudi Arabia, an enormous sovereign wealth fund, has major investments in many prominent US companies.
  • Court documents show that the fund also owns planes that were used to carry out the killing of Saudi dissident Jamal Khashoggi in 2018.
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This article was copublished by Responsible Statecraft and Insider.

In spring 2018, Silicon Valley, Hollywood, Wall Street, and major universities rolled out a red carpet for nearly three weeks to welcome Saudi Crown Prince Mohammad bin Salman to the United States.

During his trip, MBS met with Oprah Winfrey, Rupert Murdoch, Sergey Brin, Michael Douglas, Morgan Freeman, Richard Branson, Mark Zuckerberg, Jeff Bezos, and Bill Gates, among many others. The New York Times described the US tour as “seeking to change the perception of Saudi Arabia from an opaque and conservative kingdom, where mosques promote extremist ideology and women are relegated to second-class status, to a modernist desert oasis.”

But while MBS was the face of that effort, an enormous sovereign wealth fund – the Public Investment Fund of Saudi Arabia, or PIF – with about $400 billion in assets and expected to grow to $2 trillion, was the real draw for many of the tech, finance, and entertainment elites seeking photos and meetings with the 32-year-old heir to the Saudi throne.

Six months later, two planes owned by the Saudi sovereign wealth fund flew a team of assassins from Riyadh to Istanbul, where they murdered Washington Post columnist and Saudi dissident Jamal Khashoggi in the Saudi consulate. The planes then flew the kill team back to Saudi Arabia.

At least one of those planes was operating inside the US as recently as October.

Mohammed bin Salman Silicon Valley 00002
Google CEO Sundar Pichai, Saudi Crown Prince Mohammad bin Salman, and Google cofounder Sergey Brin.

The role of PIF assets in the murder was made public in court documents filed in Canada as part of an embezzlement lawsuit brought by a number of Saudi-state owned companies against Saad Aljabri, a former top Saudi Intelligence official, who is currently in exile and previously claimed in a lawsuit filed in DC District Court that MBS attempted to send a kill team to murder him shortly after Khashoggi’s assassination.

Canadian court filings, first reported by CNN and later acquired and reviewed by Responsible Statecraft and Insider, reveal that Sky Prime Aviation was transferred to PIF on December 22, 2017. Two Gulfstream jets owned by Sky Prime Aviation shuttled Khashoggi’s assassins in and out of Istanbul less than one year after the transfer of Sky Prime Aviation to PIF.

“TOP SECRET NOT FOR CIRCULATION AND VERY URGENT” reads the top of the document that detailed the transfer of a group of companies, including Sky Prime Aviation, to the PIF.

The document directs:

“According to the instruction of His Highness the Crown Prince, Chairman of the Supreme Committee for Public Corruption Cases, to transfer the ownership of all companies referred to in my aforementioned letter to the ownership of the Public Investment Fund, immediately approve the completion of the necessary procedures for this.”

“Given the central role of the crown prince in terms of controlling Saudi Arabian assets and the government writ large, there needs to be an international independent investigation to identify what state assets were used in this gruesome murder,” said Kate Kizer, policy director for advocacy group Win Without War.

The release of the Office of the Director of National Intelligence’s report last week, which concluded that MBS approved of the operation to “capture or kill” Khashoggi, led to the implementation of Magnitsky Act sanctions against a former Saudi intelligence chief and members of the group who participated in the murder.

But ultimately the Biden administration chose not to sanction or otherwise penalize MBS directly, despite the ODNI’s assessment that he approved of the operation leading to Khashoggi’s death.

jamal khashoggi
Jamal Khashoggi at the World Economic Forum in Davos, Switzerland, January 29, 2011.

“It’s a violation of Biden’s campaign promise hold the murderers of Khashoggi accountable,” said Michael Eisner, general counsel for Democracy in the Arab World Now, a group founded by Khashoggi shortly before his murder.

“We now know who ordered the murder, and he will not face the same consequences as his foot soldiers,” said Eisner. “That goes against a basic principle of justice that the person who orders a murder should face no less a severe punishment than the foot soldiers who carried it out.”

The Magnitsky Act can have far-reaching implications.

The Treasury Department describes it as being implemented “in recognition that the prevalence of human rights abuse and corruption that have their source, in whole or in substantial part, outside the United States, had reached such scope and gravity as to threaten the stability of international political and economic systems.”

“The United States seeks to impose tangible and significant consequences on those who commit serious human rights abuse or engage in corruption, as well as to protect the financial system of the United States from abuse by these same persons,” the Treasury says.

“The Biden administration should apply US Global Magnitsky Act sanctions and travel bans on senior executives at the PIF based on the use of PIF planes to move Jamal Khashoggi’s Saudi assassins between Saudi Arabia and Turkey,” said Sunjeev Bery, executive director of advocacy group Freedom Forward. “It’s ridiculous that on one hand the PIF is providing travel support for Khashoggi’s assassins while at the same time doing business deals with Uber and other companies in Silicon Valley.”

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President Donald Trump highlights arms sales to Saudi Arabia during an Oval Office meeting with Saudi Crown Prince Mohammed bin Salman, March 20, 2018.

While the role of PIF assets wasn’t mentioned in the ODNI report or the sanctions announcement, MBS’s role as chairman of PIF and the use of PIF assets – the two Gulfstream jets – raises questions about the fund’s involvement in the assassination and the knowledge of other PIF executives about the operation to kidnap or kill Khashoggi.

PIF did not respond to a request for comment about the role its planes played in the murder and about what, if any, knowledge or involvement PIF had in approving or operating the flights to Istanbul.

PIF’s status as a heavily courted investor no doubt generates considerable incentives for authorities to keep discussion about the fund’s role in the killing as quiet as possible. Funds like PIF can purchase stock in any publicly traded company, and two weeks ago, PIF increased its investment in US stock to nearly $12.8 billion. The fund holds a $1.38 billion stake in Activision Blizzard, $3.7 billion in Uber, $1.06 billion in Electronic Arts, $923 million in Live Nation, and $1.1 billion in Carnival Cruise Lines.

Sky Prime Aviation, for its part, has taken measures to limit publicly accessible data about the ongoing flight activities of the airplanes used in the operation that killed Khashoggi. But, much like MBS and the PIF, their operations inside the US appear to continue without any meaningful limitations or consequences stemming from the killing.

RadarBox, a system that tracks flight data, shows one of the Gulfstream jets that was used to fly the kill team to Turkey in 2018 flying inside the US as recently as late last year. On October 13, the Gulfstream IV with tail number HZ-SK1 departed Boston and flew to Fort Lauderdale, arriving in the late afternoon. It was the same plane that ferried the second group of assassins from Riyadh to Istanbul.

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Former Treasury Secretary Steven Mnuchin is planning an investment fund backed by Persian Gulf wealth funds, report says

FILE PHOTO: U.S. Treasury Secretary Steven Mnuchin testifies before a Senate Finance Committee hearing on the President's FY2021 Budget on Capitol Hill in Washington, U.S., February 12, 2020. REUTERS/Yuri Gripas/File Photo

Former Treasury Secretary Steven Mnuchin is planning to launch an investment fund that will be backed by sovereign wealth funds in the Persian Gulf region and other investors, the Washington Post reported on Tuesday.

Citing two people familiar with the matter, the Washington Post said the fund will invest in areas including financial technology and entertainment, among other potential sectors. 

The United Arab Emirates, Kuwait, Qatar and Saudi Arabia control some of the Persian Gulf region’s largest investment funds, according to the Sovereign Wealth Fund Institute.

Mnuchin traveled to the region frequently during his time as the head of the US Treasury, usually in relation to the treasury’s mission to combat terrorism financing. 

Before his tenure in the White House, Mnuchin worked as a filmmaker and on Wall Street, including a 17 year stint at Goldman Sachs.


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The head of the world’s biggest sovereign wealth fund was forced out because his wife is Chinese

Jon Nicolaisen
Jon Nicolaisen, Deputy Governor of Norges Bank, waits for the start of the Jackson Hole Economic Policy Symposium in Jackson Hole, Wyoming August 22, 2014.

  • Norwegian deputy central bank governor Jon Nicolaisen resigned on Friday after Norway’s security service rejected his security clearance.
  • Clearance was denied because Nicolaisen’s wife is Chinese and resides in China. The pair have been married for ten years.
  • As deputy governor Nicolaisen was in charge of the country’s $1.2 trillion sovereign wealth fund, the biggest in the world.
  • Norway has become stricter on ties to China and Russia in recent years, as its intelligence service says they are trying to find out information about the country’s petroleum industry.
  • Visit Business Insider’s homepage for more stories.

Norwegian deputy central bank governor Jon Nicolaisen announced that he was resigning on Friday, saying his application for renewed security clearance had been rejected because he has a Chinese wife.

In addition to setting monetary policy, Nicolaisen had been in charge of overseeing Norway’s $1.2 trillion sovereign wealth fund, the world’s largest.

“The Norwegian Civil Security Clearance Authority informs me that the reason that I will not receive a renewed security clearance is that my wife is a Chinese citizen and resides in China, where I support her financially,” Nicolaisen said.

“At the same time, they have determined that there are no circumstances regarding me personally that give rise to doubt about my suitability for obtaining a security clearance, but that this does not carry sufficient weight.”

“I have now had to take the consequences of this,” he said.

Nicolaisen’s resignation takes effect immediately, according to a statement released by the central bank. It was not immediately clear who would replace him.

Nicolaisen was not immediately available for further comment.

NATO-member Norway has become stricter in recent years regarding security clearances, making it difficult in many cases to get approval for anyone married to a person from a country with which Norway does not have security cooperation.

Nicolaisen was first appointed deputy governor in 2014 and was re-appointed to a second term in April of this year. The central bank said he and his wife had married in 2010.

The Chinese Embassy in Oslo was not aware of the resignation and its reasons, a spokeswoman told Reuters.

“I will miss Jon Nicolaisen in his post as deputy governor, where he performed his duties superbly as a close colleague and competent professional,” Central Bank Governor Oeystein Olsen said in a statement.

Norway’s PST intelligence service said that Russia, China, and other countries were using espionage to glean secrets of Norway’s petroleum industry and its government’s plans to cut or increase oil and gas production.

Norway is western Europe’s largest petroleum producer with daily oil and gas output of around 4 million oil-equivalent barrels.

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