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tv   The David Rubenstein Show Peer to Peer Conversations  Bloomberg  March 8, 2020 2:30pm-3:01pm EDT

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♪ >> some sovereign wealth funds said the goal is to get the highest rate of return. what is your overall principal goal? >> we need to have higher returns. growthengine of economic and saudi. david: you said publicly you would like it to be the largest sovereign wealth fund. when do you think you'll be able to get to $2 trillion? >> it is achievable by 2030. david: you had a $3.5 billion investment in uber. how did that come about? >> that came from an app that i used. it was amazing.
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>> would you fix your type type please? david: people would not recognize me if i fixed my tie. ♪ i don't consider myself a journalist. nobody else would consider myself a journalist. i took on the life of being an interviewer even though i have a day job of running a private equity firm. how do you define leadership? what is it that makes somebody tech? ick? we are here today with his yasirlency yes or over al-ruhmayan. you have both jobs. had you allocate between running the sovereign wealth fund and
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being the chair of saudi aramco? doesn't that to you 100 hours a week to do. >> p fi is an executive role. i don't have executive chairmanship in aramco. in aramco i focus on four things. the strategy, the annual targets , monetary, and managing. but my role member varies. day for a longy never of hours looking at our investment opportunities and looking over our companies. david: you became the head of pif. what sizes pif in terms of the assets? >> it was totally different from what it is today.
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changed in 2015. we changed the strategy. the assets under management was something like $150 billion. more than $330r billion dollars. david: how well did you know the crown prince before he appointed you? very well? >> i did not know him at all. i had heard of him. i received a call. wasre i took the position i the ceo of saudi capital and i turn the company around from a losing company to one of the most profitable companies in saudi arabia and the middle east.
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41% of all market investment activities. i think the conference heard of me and i got the call. david: you got a call to meet with him. >> yes. david: was it like an interview? we picked you and you have to leave your job? >> i thought it was going to be an interview but it was, here's what i want you to do. -- when he told me, when can you start? i said three months and they said one month and you will do it. the next week, i got another call saying you have to come immediately. [bleep] david: what did you tell your family? [laughter] david: what did you tell your family? >> we are all proud to be in the positive changes of the country.
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-- my kids my kids were younger than -- they all felt this was the right thing to do. david: you have said publicly you would like it to be the largest sovereign wealth fund in the world and get to $1 trillion. >> $2 trillion. david: when do you think you will be able to get to that? >> the number looks big because the largest ever wealth fund today is about $1 trillion. we think it is very much achievable by 2030 and i will tell you where the growth will come from. performance is the first and we are doing extremely good. getting assets we are from the government like different companies. we are becoming a land bank for the government. third, cash injections we are
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getting from the government and we have been getting some. recycling of our profits. david: all those different things require a big staff to manage. how big is the staff today? >> when we started it was 40 people. 700.e are more than by year end our target is to have more than 1000 full-time pif.yees anin david: they will be in saudi arabia? >> the vocal be in saudi but we are opening and other capitals of the world. hopefully in the second half of this year we will have our first office in new york and potentially london also. we were considering coverage in asia. most likely we are going to have an office either in china or hong kong or maybe even
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singapore. david: some sovereign wealth funds say their goal is to get the highest rate of return. whatever they can do legally to get the highest rate of return, and the country, out of the country. is that your mission or do you want to have certain goals like improving energy diversification in the kingdom or getting people to invest in the kingdom? what is your overall principal goal? >> it is all of the above. returns,o have higher economic impact, positive economic impact, changing the diversity or improving diversity of revenues. the -- beingne of the engine of economic growth in saudi, we are looking into renewables and how we can lower the emissions on all of these. david: a principal goal of the
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crown prince is to make the kingdom less dependent on oil. >> absolutely. david: i assume a large part of your budget comes from oil. >> yes. david: you would like to get that down to below 50%? 70% in they it is revenue increased in the past three years. eventually we want to be less dependent on oil and the reason being the volatility of the oil prices. the last thing you want to have is a volatile economy. the less volatile economy will have. david: the investments you made early on were a $3.5 billion investment into uber. you are on the board? >> yes.
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david: how did a deal like that come about? did they call you or did you think this was a good opportunity? >> it came about from an app i used. it was an amazing app and i liked the service. service foramazing the same customers for lesser process. it is just an amazing combination. uber was one of the executives in the country and he was visiting me for something else and i knew about uber. considering a capital race. i asked him to look into it, i loved it. we have layers and layers of investments and what have you.
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we came to our investment committee and they all loved it. uber whenyou use you're in the united states or the kingdom? >> i used to use it a lot. david: they must know who you are when you show up. [laughter] >> maybe they do. david: another investment you made was a very large investment, i think about $45 billion, into the vision fund. what brought that about and are you happy about that investment? i remarry sitting down with the crown prince trying to strategize on what we would like to be invested in. of course it is the future. we said artificial intelligence, robotics, a lot of other things. these were the main themes we would like to be in.
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70% of our population is under the age of 30. we need to have something sustainable for them in the long term. them for theth first time they were talking about the same things we were looking for. the alignments of thinking were what drove us to have this partnership with softbank. david: you are happy with the investment? >> it is up so far after 2.5 $9.5 billion. david: did you have people saying if you $45 billion for him, what about $45 billion for me? >> not all came in with a preposition but we have access to them. david: you are the chairman of saudi aramco which is the largest publicly traded company
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in the world and the largest oil copyright? company right? >> yes. the profits we are generating is second to none. ♪
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david: let me ask you about
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another job you have. you are the chairman of saudi aramco which is the largest publicly traded company in the world and the largest oil company in the world. >> it is the largest company from different levels -- market cap, the profits we are generating are second to none. the ipo we had was the largest in the world. david: you went public not too ang ago with evaluation of $.8 trillion. was $1.7luation abouton and now it is $1.8 trillion. david: no company is as valuable as that company but it is traded on the local stock exchange -- >> the local yes. david: have you thought about listing it in other places yet? >> we only offer 2% of the
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company. 98% of the company is owned by the shareholder which is the government of saudi arabia. another program is to have multiple numbers of listings over the years. it to haveing into more offerings and these offerings could continue to be in saudi and if we have any stock exchanges we think can bring some value and investors to us, we will definitely consider it. david: many organizations saying they want to be carbon neutral by a certain time because carbon contributes to global climate change. >> absolutely. david: what is the position in saudi arabia? do you want to be carbon neutral? >> saudi aramco has been working on emissions for decades. we have one of the largest, if not the largest, production but at the same time -- as a country and company -- one of the lowest
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emissions for a good reason. we started early on to have more efficient. we have been working in aramco for the past 84 years. the concession we have from the government is about 60 years and like most of the other oil and gas companies, their concessions are 5-10 years. site we we go to a oil want to make sure this is big enough to produce more and at the same time our depletion rates is very small. some that we had 86 years ago or 84 years ago are up-to-date. having said that, oil is very much important. it is the cheapest fossil fuel generally. it is the cheapest energy source. today you have over one billion people in the world that don't
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have access. you've got to cater to those people. that is why we think we should be more efficient but should not forget who we are and what we do. david: saudi arabia was the biggest producer of oil in the d and i think the united states might be or may be russia. ia could produce more oil given the reserves you have but you're quite comfortable at the level you're producing? >> it is about 10 billion barrels a day. david: it is often said in the oil world that you have the lowest looking cost which means you can extract oil more cheaply than anyone because it is close to the surface. is that more or less true? >> it is true. betweenr companies cost $20 and $50. david: what are the biggest
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challenges you face as chairman? memberve been the board of aramco for the last five years. then i was part of the ipo committee and things were not going as i thought it should be going. i had a number of discussions with the committee members and told them we have to do it this way and discussions with the government and crown prince. after a while, i was appointed as the chairman of the committee. summer and we said we have to get the ipo done before the end of 2019. we got it done and that was a huge challenge. the valuation was amazing. the demand we got was really great, almost five times the demand.
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that was the initial challenge. david: what would you like people to know about saudi arabia? >> saudi arabia is progressive every day. the progress we are witnessing is amazing. ♪
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♪ >> welcome to reality. welcome to the future investment. david: you instituted a conference in riyadh which is an annual event not unlike davos. it is a gathering of the elites
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of the investment world and they come to a conference you sponsor. why do you do that conference and are you going to continue to do that? >> we will definitely continue to do it. in fact, the conference has transformed into an institution so now it is the fii institution. we have done it for the third year in a row and we will continue doing it every year. the crown prince announced a project i am assuming you are investing in to build a new city. >> yes. david: is that something are involved in or the people you invested with are involved in? >> that is part of pif. we have six different pools of investment. we have another three gige
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in addition to the other pool of real estate. and infrastructure david: people who have never been to saudi arabia, you would say what they should know about saudi arabia is what? it is different than they might think? the image might be different? what would you like people to know about saudi arabia? >> saudi arabia is progressing every day and the progress we are witnessing is amazing. we are opening up to tourism. it is one of the best in the world. we were debating doing skiing my family and it was an amazing location. david: you are the head of the family and want to go a certain place and to say i am the head of saudi aramco and pif this is where we go or did the children vote? >> that does not work with my
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wife and children. [laughter] david: saudi arabia is a kingdom. there is a king in day crown prince as well as a royal family. his saudi arabia governed much differently? if you look at the middle east -- if you look at the world actually, we have the same system since the 1930's. kingdom himrd saudi into existence. the good thing about the regime we have is it is progressing and developing. that is why we have reform. have aest reforms we really good. it started in the economic and social and outgoing to the security and political reform. system that has been there for the past 89
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years. david: if you are looking at the future of saudi arabia, you would like it to be much less dependent on oil and 20 or 30 years. is that right? >> yes? . your. david: your other goals are to make saudi arabia more comparable to other western countries in terms of the business community? >> absolutely. we are opening up the saudi economy and we are open for business. david: you are the chairman of saudi aramco. that must take some time. >> yes. david: your chief executive of the pif and that takes time. you must have a little time for one of your hobbies which is golf. you are the chairman of the national golf -- >> saudi gulf federation. david: are there a lot of golf courses? >> we have four or five of them.
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speaking aramco had about 14-20 desert golf courses. golf started in the kingdom long ago in the 1930's when aramco started and most of the american engineers who came in started playing golf. it was just in the desert. david: i assume sand trap sore big? [laughter] >> i cannot get the ball out. david: you are a 12 handicap golfer? >> yes. david: you are going to get the scratch? >> i don't thing i have the time to go into scratch. [laughter] david: you have played in major tournaments? >> yes. we had the second saudi international tournament which is part of the pga tour. out of thee had four
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top five players in the world. this year we had three out of the top five players in the world. next month we are going to have the first lady's european tour. it will be an amazing experience. david: if you are playing, you're the head of the saudi aramco and pif, when you have a putt of three or four feet did they give it to you? >> no comment. [laughter] david: by my standard you are a teenager. you are very young. [laughter] you have a lot more energy than i have but are you happy with these jobs and you are going to keep doing them for the foreseeable future? you are not going to say i am out of here in five years? you love what you're doing? >> i am so excited about this it and the good thing about is the impact you are creating. the impact we are creating not
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only in saudi arabia but the region and the world. ♪
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coming up on "bloomberg best," the stories that shaped the week in business around the world. the coronavirus continues to spread, markets ride a roller coaster as governments and central banks wield policy tools to combat the crisis. >> the best thing is to throw some strong medicine at the situation. >> it has been a bumpy ride. i think it is probably fair to conclude that it will remain a bumpy ride. >> people are selling everything that is not nailed down and going to treasuries. ritika: the fed takes action earlier today with a rate cut, top officials provide an exclusive insight on the move. >> i thought it would be wiser to act now and act boldly.
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