In a year of robust financial activities, Saudi Arabia’s Public Investment Fund (PIF) emerged as a major player, accounting for roughly 25% of the nearly $124 billion spent by sovereign wealth funds globally in 2023, as per a recent report released at the onset of the year.
The PIF’s staggering expenditure of $31.5 billion last year is highlighted in a provisional annual review by Global SWF, an entity that monitors sovereign investment funds. This figure is part of the overall investments made by these funds, which saw their managed assets peak at an unprecedented $11.2 trillion, buoyed by a strong performance in global stock markets.
Investments directed towards the energy transition, encompassing initiatives such as green hydrogen and lithium mining, also reached a zenith with a record $25.9 billion in 2023. Nonetheless, the total outlay by sovereign wealth funds saw a 21% decline from the previous year.
Diego López, the managing director of Global SWF, suggested a possible overabundance of caution among these institutions, noting that there was ample capital available for investments.
Meanwhile, Singapore’s GIC, a forerunner in sovereign fund spending for six years, reduced its investments by 48% in 2023, despite receiving a substantial $144 billion from the nation’s central bank. On the other hand, Gulf sovereign funds, particularly at the cost of their Canadian and Singaporean counterparts, have bolstered their presence in deal-making, now representing nearly 40% of the investment value distributed by sovereign wealth funds.
The intricacies of the PIF’s individual investments were not detailed in the Global SWF report. However, the fund’s lavish expenditure in the sports arena, especially in soccer and golf, has gained significant attention. Notably, Saudi Arabia’s Crown Prince Mohammed bin Salman announced in June that PIF would assume control of the country’s top four soccer clubs. Additionally, a surprise merger agreement involving the PGA Tour, DP World Tour, and the Saudi-backed LIV golf circuit was unveiled, though this deal has yet to be finalized.
Investments by the PIF span various sectors, with 42% allocated domestically. Some notable acquisitions include a $4.9 billion investment in the U.S. gaming company Scopely, a $3.6 billion acquisition of Standard Chartered’s aircraft leasing arm, and a $3.3 billion stake in steelmaker Hadeed.
“The array of transactions underscores PIF’s unmatched scope and influence, all designed to capture strategic value for the Saudi Vision 2030,” stated López, referencing the nation’s ambitious plan for economic reform.
The report also sheds light on the PIF’s intentions to launch an airline and introduce a native electric vehicle brand. Additionally, the fund holds an $8.1 billion position in prominent gaming firms including Activision Blizzard, Electronic Arts, and Take-Two, aligning with its objective to transform the country into a gaming hub.
Looking to 2024, Global SWF foresees the collective assets of all state-owned investors — which encompass sovereign wealth funds, central banks, and pension funds — to eclipse the $50.8 trillion peak reached in 2021, taking into account the appreciations from the past year.