RIYADH, May 6 (Reuters) – Saudi Arabia said it is setting up a $5.33 billion investment firm that may be open to partners, and could initially focus investments in the technology sector.
Finance Minister Ibrahim al-Assaf also urged countries' to keep their doors open to foreign investment.
“What we are setting up is an investment company, not a sovereign fund,” al-Assaf told delegates at a conference in the Saudi capital on Tuesday.
Saudi officials had previously said the world's biggest oil exporter intended to set up a $6 billion sovereign wealth fund.
The finance minister told Reuters on Tuesday that the country is “in a hurry” to begin the new agency.
“It is now being examined by the Council of Ministers. The approval should come about within the usual timeframe,” he said.
“The focus at the beginning may be on the technology sectors, especially in the fields that could attract technology to the kingdom in alliance with global companies,” Ibrahim al-Assaf told Al Arabiya television.
The focus would be on investments inside the world's largest oil exporter, where opportunities abound, Assaf said, adding foreign investment was not ruled out.
Sovereign wealth funds, many based in oil-producing countries as well as key Asian exporters such as China, control between $2 to $3 trillion in assets.
Investments by the funds have raised concern about their potential political motives among Western countries, some of which are considering restrictions on their activities.
The Saudi finance minister noted on Tuesday that the new agency would be smaller than other state-owned funds in the Gulf. “We would like to invest in profitable, low-risk assets,” he told conference delegates, without being more specific.
“I reiterate the importance of avoiding restrictions on flows of capital … whether these are coming from emerging countries or the opposite.”
Last week, the International Monetary Fund and 25 sovereign wealth funds established an international working group to draft best practice guidelines for state-owned funds.
The guidelines in governance and transparency are aimed at helping ease worries about the funds' growing
In recent months, sovereign wealth funds have shown they are also market stabilizers, investing billions of dollars in Western banks such as Citigroup Inc (C.N: Quote, Profile, Research), whose balance sheets were hit by the financial market turmoil.
(Writing by Amran Abocar; editing by Elaine Hardcastle)