Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is shifting its focus back to the domestic economy after years of extensive international investments.
The PIF, with assets valued at approximately $930 billion, plans to reduce its overseas investments to 18-20%, a decrease from the current 21% and a significant drop from 30% in 2020. This strategy aims to strengthen the local economy amid falling oil revenues.
Yasir al-Rumayyan, PIF’s governor, highlighted this shift during the Future Investment Initiative in Riyadh. He noted the fund’s past focus on international investments, which grew from 2% to 30%, and emphasized the current goal to balance this with domestic commitments.
While the proportion of international investments is decreasing, the overall value of the fund continues to grow, with a target of reaching $2 trillion in assets by 2030. This move reflects the PIF’s dual mission to generate financial returns and support Saudi projects.
The PIF’s new approach also includes more stringent conditions for fund managers, requiring increased investment in Saudi Arabia. This transition has prompted international investors to seek co-investment opportunities with the PIF rather than merely seeking its financial backing.
Historically, the PIF has been involved in notable deals, such as investing in SoftBank’s Vision Fund and Blackstone’s infrastructure fund. However, it has recently reduced its stakes in US companies and scaled back its international sports investments.
Despite these changes, Saudi Arabia’s ambitious projects, like the $500 billion Neom development and hosting major international events, remain on track. However, there is now a focus on fiscal prudence, with some projects being reconsidered or adjusted.