Newcastle United's prospective new chairman reveals reasons behind Saudi PIF takeover deal

Questions have been raised around why - as the world's finances contract - PIF are on the front foot when it comes to investing?

To Rumayyan and PIF, the answer is simple.

Speaking at an online investment forum yesterday, the PIF chief revealed the fund would continue to grow its portfolio. Earlier this month PIF bought an 8.2% stake in coronavirus-hit Carnival Corp, as well as managing more than £240billion worth of assets around the world, including a stake in Uber. This follows on from acquiring stakes worth more than £800million in four major European oil companies, Equinor ASA, Royal Dutch Shell PLC, Total SA and Eni SpA.

"There will be economies up and running, we will see a lot of potential," he is quoted as saying in a New York Times piece.

PIF remain in the market amid the COVID-19-driven economic downturn and are looking to expand investments in the aviation, oil and gas and entertainment industries, according to Rumayyan - and this is where Newcastle United come into the Saudi's thinking.

Subject to the Premier League owners and directors test green light, which is expected to come before the end of next week, Newcastle United will be added to that growing portfolio in a deal worth around £300million.

But why are the Saudis so keen to dive in where Mike Ashley was desperate to tap out?

Rumayyan, speaking in late February with Bloomberg's The David Rubenstein Show, revealed two key aims of PIF as part of Crown Prince Mohammad bin Salman's ground-breaking Vision 2030 plan.

"We want the fund to be worth $2trillion," said Rumayyan, which, if achieved would make the Saudi sovereign wealth fund the biggest on the planet, using current figures.

"We think this is achievable before 2030. We will do this by improving performance and assets."

The purchase of Newcastle represents a key component of the Saudi's second major aim, to diversify their economy away from oil revenue.

"We want to become less reliant on oil - currently it is 70%, non oil revenue has increased recently. The reason being the volatile oil prices. The more non oil revenue the more sustainable you are.

"We need to have high returns, economic impact positive, change the diversity, improve diversity of revenues also being the engine of the economic growth in Saudi we will look at energy.

"70% of our population is under the age of 30. So we need to have something sustainable for them."

The high-profile examples of human rights abuses, the murder of Jamal Khashoggi and archaic, often brutal, actioning of Islamic law - the third Saudi state's founding fathers followed the ancient scriptures in a form of Islam known as Wahhabism - paints a certain picture for the Western mind.

This, according to Rumayyan, is a misconception. The Kingdom is, in his words, open for business.

"Saudi Arabia is progressing, every day," he said.

"The progress we are making is amazing. We are opening up for tourism.

"The regime is progressing and progressing, that is why we have reform after reform.

"The latest reforms started in the economic and the social and now it is focusing on the security and political reform.

"We are opening up the Saudi economy - Saudi is open for business."

The Crown Prince, known as MBS, who is in line to take the Saudi thrown, is at the forefront of this vision - and the modernisation of the state is something he hopes to accelerate.

In recent years MBS has restricted the powers of the religious police, known for their brutal implementation of Islamic law, and has improved the rights of women in the state with females now allowed to drive, since 2018, as well as weakening the male-guardianship system, which previously saw women only able to mix with males from their own family.

"I had never met him, I had heard of him," said Rumayyan, of his first contact with MBS.

"Before I took the post (chairman of the world's most profitable company Saudi Aramco) I was a CEO of Saudi Fransi Capital - I turned this company from a losing company to one of the most profitable in the Middle East. So, the Crown Prince had heard of me and I got the call.

"When I met him I thought it was going to be an interview, but it was like 'this is what I want you to do... one, two, three, four, all this kind of thing.

"When he asked me when I could start I said 'maybe three months', he said 'no, one month and you will do it'. Then the next week I got a call saying you must come immediately."

Could this be a sign that the Saudis will be in no mood to take things easy at St James's Park? It could be, although much of the day-to-day running of United is set to be taken on by the PCP Capital Partners and Reuben Brothers investors.

PCP's Amanda Staveley and her husband Mehrdad Ghodoussi are thought to be board members alongside Rumayyan, while Jamie Reuben, son of David Reuben, will also have a chair at the top table.

A mere look at the ethnic and religious make-up of the United board would suggest a more outward-looking take on modern Saudi, compared to perceptions stemming from its totalitarian, restrictive, unethical and intolerant past.

Ghodoussi is Iranian-born, a country which Saudi has severed ties with amid the break out of a proxy war, coined by some experts as the Middle East's Cold War, while the Reubens come from Baghdadi Jewish stock.

Just how much time will Rumayyan be able to commit to the United enterprise? He's certainly a busy man, as he explains to Bloomberg further.

"PIF is an executive role while Aramco is a chairmanship," he said.

"In Aramco I focus on four things - the strategy, the targets, monitoring performance and managing the actual board. While at PIF "I am the governor there and although I am a board member my role is totally different. It is an executive role looking for investment opportunities and taking care of our current portfolio of companies.

"It takes up a lot of my time."

Details of the process Rumayyan had to go through to get his $3.5billion purchase of a stake in Uber the 'OK' gives an insight into the level of scrutiny this United deal has been subject to.

Of his Uber buy, Rumayyan said: "It was an amazing app. They provided a better service for the same customers at a better price. An Uber executive was visiting the country and I asked him about it. He said they were considering a capital raise. And I asked the team to look into it, they loved it.

"The decision went through the whole governance structure that we have - and we have layers and layers of investment diligence and what have you. And then we came to our investment committee, then our board, and they all loved it."

If anything, this proves that Rumayyan, and his Saudi PIF machine have not taken the decision to jump into the Premier League lightly - and while riches will be lavished on United undoubtedly, this will be done with the idea the football club, very much a sovereign wealth fund asset, will have to grow its worth well beyond the £300million valuation placed on it by out-going Sports Direct tycoon Ashley. Anyone with any knowledge of the situation, though, including Staveley, would not doubt the room to grow on Tyneside.