(Bloomberg) -- Saudi Arabia will combine two state-run pension and unemployment insurance funds into an entity with almost $29 billion of local and foreign stocks.

The cabinet approved the combination of the Public Pension Agency and the General Organization of Social Insurance, also known as GOSI. It’ll boost investment returns, reduce costs and help with their diversification, Finance Minister and GOSI Chairman Mohammed Al Jadaan said in a statement.

The funds hold significant stakes in Saudi Arabian firms, including a combined $8.5 billion holding in Saudi National Bank and a $4.3 billion stake in Al Rajhi Bank, according to data compiled by Bloomberg. They also hold shares worth $207 million in AstraZeneca Plc and $170 million in HSBC Holdings Plc. Their portfolios also include real estate and bonds.

Saudi Arabia has been taking steps to merge and restructure various entities as it looks to boost efficiency as part of a plan to diversify the economy away from oil. The Public Investment Fund, the country’s $430 billion sovereign wealth fund, is mandated with investing in new industries inside the kingdom, while also buying stakes abroad.

The kingdom has also bought several local funds focused on sector including real estate, industry, and agriculture together under the National Development Fund to reduce overlap and costs.

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  • Click here for Public Pension Agency holdings

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