American private equity firm Blackstone and the Public Investment Fund (PIF) of Saudi Arabia have signed a memorandum of understanding to launch a new investment vehicle that will focus on infrastructure projects.

Blackstone said that the new unveiling of the new vehicle marks the launch of a new business for the firm, to which PIF will serve as a strategic partner.

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Blackstone, which manages over $360bn in assets, already has investment vehicles for private equity, real estate, public debt and equity, non-investment grade credit, real assets and secondary funds.

Blackstone president Hamilton James said: “There is broad agreement that the United States urgently needs to invest in its rapidly aging infrastructure. This will create well-paying American jobs and will lay the foundation for stronger long-term economic growth.”

The new vehicle is expected to have $40bn in total equity commitments, including a $20bn anchor investment from PIF. Through this equity and additional debt financing, Blackstone intends to invest in over $100bn of infrastructure projects, mainly in the US.

PIF managing director Yasir Al Rumayyan added: “We look forward to partnering with Blackstone, a recognized leader with a strong record of achievement across its extensive infrastructure projects.

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“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.”