Saudi Arabia’s Public Investment Fund (PIF) reported a US$11 billion loss for 2022 as global markets tanked, but its annual accounts filed this week with the London Stock Exchange show it has ramped up its Middle East holdings by a staggering US$94 billion to US$175 billion (up 166%) in just two years as it seeks to become a regional investor heavyweight.
MENA shareholdings represented nearly three-quarters of PIF’s growth in public equities in 2020-2022, thanks to the transfer of chunky assets as well as investment in robust regional bourses. As a result, the sovereign wealth fund hiked its assets by US$102 billion to US$778 billion – a 15% rise over 2021 levels – and securing its position as the world’s sixth biggest sovereign wealth fund. Over the two-year period, its public market holdings in Europe grew 44% to US$35 billion and its USA holdings rose 13% to US$81 billion, while the rest of the world increased 66% to US$32 billion.
The balance sheet does not include PIF’s investments in domestic giga-projects, like NEOM and Qiddiyah, which are bound to add hundreds of billions to its value on completion – although the fund has yet to state how much co-investment it has secured with private partners. As such, PIF is well on the way to reaching its goal of US$1 trillion by 2025 and US$2 trillion AUM by 2030.
PIF’s fevered activity in H1 2023 indicated it will see its portfolio boosted further as it becomes an umbrella for domestic economic development, notably with the transfer of 4% stake in oil giant Aramco to the fund by the government with a value of SAR291.3 billion (US$77.7 billion). The Aramco stake alone could have raised PIF’s total assets under management to US$856 billion, putting it ahead of the Kuwait Investment Authority to become MENA’s second biggest sovereign wealth fund after the Abu Dhabi Investment Authority (ADIA) and the world’s fifth largest.
Meanwhile, PIF subsidiaries Water & Electricity holding Company and ACWA Power signed power purchase agreements for three large-scale photo voltaic Solar Plants with the Saudi Power Procurement Company (SPPC) with a contract value of SAR12.2 billion (US$3.3 billion). However, early payment by Aramco on promissory notes led to a loss of SAR5.87 billion (US$1.6 billion) for the fund.
As part of its program to develop a new national flag carrier, PIF through a subsidiary signed agreements to purchase up to 72 aircraft with a deal value of around SAR 43.88 billion (US$11.7 billion); the agreement includes 39 confirmed aircraft with an option to acquire 33 additional aircraft (including spare engines), said the filing. Its aircraft leasing firm has also agreed to acquire 33 aircraft for SAR6.3 billion.
The fund is also in the process of acquiring gaming firm Scopely for SAR18.38 billion (US$4.9 billion), while also working to unify the game of golf with PGA Tour and DP World Tour. Elsewhere in the world of sport, PIF snapped up 75% ownership of four Saudi football clubs, namely Al Ittihad, Al Ahli, Al Nassr and Al Hilal, which are the target of massive investment efforts with the purchase of worldclass players. Such investments in sport, leisure and gaming are likely to bolster AUM in the long-term.
