The Public Investment Fund of Saudi Arabia, known as PIF, finally released its 2022 annual report on Sunday, and there is plenty of information to digest in the 140-page document.
The assets under management (AuM) at the end of December 2022 was US$ 600 billion. This figure has significantly increased since then, thanks to an additional 4% stake in Aramco transferred to Sanabil, and to additional oil surplus. According to PIF’s website, AuM is now at US$ 700 billion, which makes it the world’s seventh largest SWF.
Unlike 2021 report, which promptly announced the excellent single-year return (25%), the investment return of 2022 is conveniently buried in a five-year rolling return of 8%. However, given that we know 2018-2020 returns, and 2021 return, we can estimate 2022 return in -6.5%. This compares to an average of -5.5% for all SWFs in calendar year 2022 (see below).
When comparing returns, we should not forget PIF’s “double-bottom line”, though. Only in 2022, the Saudi fund established 25 new companies and created 181,000 new jobs in the Kingdom.
In fact, we observe a decrease in international strategic investments (Softbank, Blackstone, Uber, Lucid, etc.), to the benefit of Saudi Equity Holdings (Aramco), Saudi Sector Development (80 companies in strategic sectors) and Saudi Giga Projects (which are starting to be capitalized and recognized in the balance sheet). Only in 2022, PIF invested US$ 6.8 billion in NEOM.
For the first time, we learn the portion of the portfolio internally managed (83%) and outsourced (17%). This is in line with best practices in Canada and Singapore, and much higher than some of PIF’s peers in the Middle East.
The headcount increased dramatically in 2022, when 666 new employees joined PIF. The resulting headcount of 1,940 makes PIF the second largest SWF, closely behind Singapore’s GIC. 83% of the employees are Saudi nationals, and 70% are men. The fund only has one female executive.
Lastly, the representative offices of New York, London and Hong Kong continue to be announced. Judging from public data though, the progress of staffing the New York office is much more advanced, while the offices of London and Hong Kong remain almost vacant.
PIF faces a number of challenges and opportunities in the six years to 2030, as it aims to become the world’s largest SWF, and as it juggles domestic development and giga projects with complex international investments and partnerships.
We are now only missing four key 2022 annual reports: ADIA, CIC, NSSF and Samruk Kazyna.