The Public Investment Fund (PIF) of Saudi Arabia has committed $20bn (€17.8bn) to a new infrastructure fund launched by Blackstone.

The sovereign wealth fund has agreed to fund half of the capital for a $40bn vehicle targeting infrastructure assets in the US.

The announcement was made at the weekend while Donald Trump was visiting Saudi Arabia as part of his first overseas trip as US president.

Blackstone, which has invested $40bn in infrastructure over the past 15 years, said it expects to invest $100bn in infrastructure in the future through the use of debt financing.

Last month, the alternatives asset manager revealed it had $368bn in assets under management, led by real estate ($101bn) and private equity ($99.7bn).

Blackstone said the new fund represented the launch of a new business and the collaboration with PIF was the culmination of 12 months of discussions.

It said its memorandum of understanding with PIF was “non-binding” and negotiations would continue.

Blackstone President Hamilton James said: “There is broad agreement that the US urgently needs to invest in its rapidly ageing infrastructure.”

Infrastructure in the US is graded D-plus by the American Society of Civil Engineers. Blackstone said independent estimates put the country’s infrastructure funding gap at up to $2trn.

James said the new investment would “create well-paying American jobs and will lay the foundation for stronger long-term economic growth.

“Blackstone has the talent, scale and experience to be an effective private sector partner in filling the massive infrastructure funding gap.

“We thank PIF for its strong endorsement of the US and its vote of confidence in our country and Blackstone in making this investment.”

HE Yasir Al Rumayyan, managing director of PIF, said: “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.”