- PIF and Ares Management invested UK£400m into McLaren two years ago
- Saudi sovereign wealth fund previously linked with offer to buy F1
Saudi Arabia’s Public Investment Fund (PIF) is selling its preference shares in McLaren Group to Mumtalakat, Bahrain’s state investment fund, according to Sky News.
The report says it is a private transaction of preference shares and warrants that will not lead to any new investment coming into the company, which owns the McLaren Formula One team. It comes two years after PIF and Ares Management pumped UK£400 million (US$510 million) into McLaren.
Sky News reports that the deal forms part of efforts by the McLaren board to clean up the company’s capital structure. It is expected to follow the cancellation of the preference shares by raising further equity in the coming months.
Due to the self-sustaining nature of the Formula One team, this is likely to have little knock-on effect on the racing arm of the company.
PIF’s move to sell comes at a time when it is ramping up investment into sports, most notably through the merger between Saudi-backed LIV Golf and the PGA and DP World Tours and the recent influx of soccer stars heading to the Saudi Pro League.
The Saudi sovereign wealth fund was also previously linked with an offer to purchase Formula One which would have valued the series at US$20 billion. However, the country’s sports minister called these rumours “purely speculation”.
Interestingly, PIF has remained on the periphery of Formula One, only previously investing in the automotive arms of McLaren and Aston Martin. However, Saudi funding is rumoured to be behind a new Formula One team targeting a 2026 entry, led by British American Racing (BAR) founder Craig Pollock.