RIYADH — The Saudi Public Investment Fund (PIF) is pivotal in achieving the objectives of the Kingdom’s Vision 2030. As the main driver of economic transformation in the Gulf nation, the PIF not only contributes to the vision’s goals but also achieves unique global-scale accomplishments.
As one of the world’s largest sovereign wealth funds, the PIF possesses significant investment reserves within Saudi Arabia and the Arab world, extending its reach to various countries globally. It invests in promising local and international opportunities.
In 2023, the Fund accounted for about a quarter of the total expenditure by sovereign wealth funds worldwide, enhancing investment deals and diversifying into sectors like tourism and sports.”
Significant year
A recent report by the ‘Global SWF’ platform, which monitors sovereign investment funds worldwide, revealed that the Saudi fund disbursed $31.5 billion of the approximate $124 billion spent globally. This expenditure is notably higher than in previous years.
At A Glance PIF's Role in Vision 2030: Key driver in Saudi Arabia's economic transformation and Vision 2030. Global Investments: Significant global presence, investing in local and international opportunities. 2023 Expenditure: Quarter of worldwide sovereign wealth fund expenditure. Sports and Gaming Investments: Major impact in football, golf, and electronic gaming sectors. Domestic Focus: 42% of spending on local Saudi industries. Diverse Portfolio: Investments in pharmaceuticals, aviation, tourism, and more. Strategic Acquisitions: Including Scopely, Standard Chartered's aircraft leasing division, and Hadeed steel. New Ventures: Plans for an airline, electric car brand, and stake in Heathrow Airport. Economic Impact: Established 93 companies, managing $701 billion in assets, and creating over 644,000 jobs.
According to Bloomberg, the Saudi fund was the world’s most active last year, bolstering its deals while other funds scaled back spending. The robust performance of global stock exchanges last year led to a record increase in assets managed by sovereign wealth funds, totaling $11.2 trillion.
Major expenditures
Reuters reports that while specific investments by the Saudi Fund were not disclosed, its substantial investments in football and golf have caused a stir in the sports world. In June 2023, Crown Prince Mohammed bin Salman announced the fund’s acquisition of four Saudi clubs, including Al-Ittihad, Al-Ahly, Al-Hilal, and Al-Nasr.
The same month saw a major development in golf, with the Kingdom announcing a merger agreement among the Professional Golfers Association in the United States, the DP World Tour, and the Saudi PIF-backed ‘Leaf Golf.’ This merger, however, is still pending completion.
Beyond sports, the Kingdom’s investments have been significant in various sectors, with 42 percent of spending focused domestically. Notable acquisitions include a $4.9 billion purchase of the American gaming company Scopely, a $3.6 billion acquisition of the aircraft leasing division of Standard Chartered, and a $3.3 billion buyout of the Hadeed steel manufacturing company. The fund is also planning to launch an airline and an electric car brand. It currently holds an $8.1 billion stake in gaming giants Activision Blizzard and Electronic Arts, underscoring its ambition to make the Kingdom a hub for electronic gaming.
In November, the Saudi Press Agency (SPA) reported that the PIF had agreed to buy a 10 percent stake in Topco, the parent company of Heathrow Airport, from Ferrovial.
Diverse Investments
Throughout 2023, the Saudi economy experienced various developments, some linked to the Investment Fund. The Crown Prince kick-started the year by launching 15 companies. In February, the Fund announced a $1.33 billion investment in minority stakes across four local building and construction service companies: Nesma & Partners Contracting Company, Al-Saif Engineers and Contracting Company, Al Bawani Holding, and Al Mabani General Contractors.
On February 16, the establishment of the New Square Development Company was announced, aiming to create Riyadh’s largest modern downtown. This project is expected to contribute up to $48 billion to the non-oil domestic product and create 334,000 direct and indirect jobs.
March 12 saw the announcement of the formation of Riyadh Air Company, intended to develop the air transport sector and enhance Saudi aviation, with plans to operate flights to over 100 destinations worldwide by 2030.
On May 25, the Badael company was launched, offering innovative, less harmful smoking alternatives. This initiative aims to assist over 25 percent of the Kingdom’s smokers and potentially save more than $1.60 billion annually in health care costs by 2032.
On June 18, ‘Livera,’ a company specializing in the pharmaceutical industry, was launched to boost the sector’s growth. By focusing on the commercial production of biopharmaceuticals, Livera aims to establish the Kingdom as a global pharmaceutical production hub.
July 20 marked the establishment of ‘Sawani,’ a company aimed at promoting the camel milk industry in the local market and educating consumers about the nutritional benefits of camel milk products. Following closely, on July 23, ‘Turath Al Madina’ was set up to develop and enhance the value of local ajwa date products, contributing to the growth of the Kingdom’s food and agricultural sector.
Shortly thereafter, Asfar Company was founded to invest in the local tourism sector. It focuses on creating and developing tourist destinations across the Kingdom, empowering the private sector through joint investments, and providing opportunities for local contractors and suppliers.
The Saudi Fund introduced ‘Sarj’ on August 6, a sports investment company aimed at fostering the sports sector’s growth in the Kingdom and the Middle East and North Africa region.
Kayani Company was established on August 7 with the mission to promote a healthy lifestyle for women in the Kingdom using advanced technology, aspiring to be a global leader in this space.
On August 10, the Saudi Facilities Management Company was announced, specializing in integrated services such as facilities management, energy and waste management, maintenance, cleaning, security, and landscaping.
‘Tatweer Al Balad’ Company was established on October 3 to develop the historic area of Jeddah, transforming it into a global cultural and heritage destination.
Finally, on October 6, Ardara launched its inaugural project to develop the ‘Wadi Abha’ project in Asir, envisioning it as an urban center and an attractive tourist destination for both local and international visitors.
On October 8, the PIF and the Saudi Electricity Company launched the ‘Infrastructure for Electric Vehicles’ initiative, with the Fund holding a 75 percent stake and the Saudi Electricity Company owning the remaining 25 percent.
Then, on October 10, 2023, the sovereign Fund established ‘Tasora Mobility Investments,’ a firm specializing in developing local automotive and mobility supply chains within the Kingdom.
December 11 witnessed the announcement of the formation of ‘Dan’ Company, focusing on rural and environmental tourism in partnership with local communities. The company plans to develop and operate various destinations, including upscale resorts and rustic inns, in collaboration with these communities.
Steady growth
According to data from local media, since 2017, the PIF has established 93 companies, with investments spanning 13 strategic sectors. It currently manages $701 billion in assets and has created over 644,000 direct and indirect job opportunities.
The PIF is striving to become a leading global investment destination. Its strategy includes developing six diverse local and international investment portfolios across several sectors, aiming to achieve substantial financial returns for the Kingdom.