NEW YORK CITY—Blackstone and Saudi Arabia's Public Investment Fund have signed a non-binding memorandum of understanding to establish a $40-billion infrastructure vehicle. PIF will provide an anchor contribution of $20 billion, with the balance to be raised from other investors.

“This potential investment reflects our positive views around the ambitious infrastructure initiatives being undertaken in the United States as announced by President Trump, and the strategic opportunity for the Public Investment Fund to achieve long-term returns given historical investment shortfalls,” says H.E. Yasir Al Rumayyan, PIF's managing director. Blackstone ultimately expects to invest in more than $100 billion of infrastructure projects, mainly in the US; globally the asset management giant has invested $40 billion in the sector over the past 15 years.

“There is broad agreement that the United States urgently needs to invest in its rapidly aging infrastructure,” says Blackstone president Hamilton James. Blackstone cites independent estimates putting the funding gap for US infrastructure at $2 trillion. “This will create well-paying American jobs and will lay the foundation for stronger long-term economic growth.”

With terms still be ironed out, the proposed vehicle will launch a new business for PIF. Blackstone and PIF have been in discussions for a year about the venture.