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Saudi Arabia’s PIF Assets Rise To $940 Billion Making It World’s Fifth Largest SWF
Saudi Arabias PIF Assets Rise to $940 Billion Making It Worlds Fifth Largest SWF

Saudi Arabia’s Public Investment Fund (The PIF) has become the world’s 5th largest sovereign wealth fund with total assets now reaching a staggering $940.26 billion.

The increase was achieved by an 8% additional stake in Aramco, boosting The PIF’s assets by $163.6 billion and potentially positioning it to reach $1 trillion by 2025.

The Aramco stake now constitutes 37% of PIF’s portfolio, and its dividends are expected to help fund ongoing Giga projects in the Kingdom, such as NEOM as well as fund acquisitions overseas.

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The PIF’s Leap in the SWF Rankings

The PIF’s recent rise in the SWF rankings is mainly due to a significant increase in the fund’s total assets. In a Sovereign Wealth Fund Institute report, the PIF’s assets were reported to have surged by $163.6 billion, elevating the total to an impressive $940.26 billion. 

This upsurge represents a considerable achievement for the PIF and signifies its growing influence on the global stage.

The PIF’s Game Changing Aramco Deal

Image Credit The PIF

A pivotal element in the PIF’s ascension in the SWF rankings was the transfer of an 8% stake in Saudi Aramco to the fund’s portfolio companies. This move was announced by Crown Prince Mohammed bin Salman and marked a significant milestone in the PIF’s growth trajectory.

The Aramco stake, estimated at $163.6 billion based on market capitalization, includes a direct 4% ownership transferred in 2022.

Additionally, the stake includes 4% indirectly held through PIF’s wholly-owned unit, Sanabil Investments, which was transferred last year.  This strategic acquisition has notably influenced the PIF’s total assets under management.

The Implications of the Aramco Deal

The Aramco stake acquisition has far-reaching implications for the PIF. With the Aramco stake now constituting approximately 37 percent of the PIF’s portfolio value, it marks a significant milestone in the fund’s growth trajectory and its central role in Saudi Arabia’s broader economic diversification strategy.

Furthermore, the substantial stake in Aramco is expected to generate billions in annual dividends for PIF, further reinforcing its investment capacity. This will undoubtedly boost the PIF’s capabilities to foster growth and diversification, a key objective in Saudi Arabia’s Vision 2030 initiative.

Global Ranking of Sovereign Wealth Funds

As PIF climbs the global rankings, it is worth noting the other leading players in the sovereign wealth fund sector. Norway’s Government Pension Fund Global ranks first with $1.64 trillion in assets, followed by China Investment Corp with $1.35 trillion in assets.

The aggregate assets of the world’s SWFs have also seen a significant increase, hitting about $12.70 trillion, up from $11.67 trillion in July 2023. This global growth underscores sovereign wealth funds’ increasing importance and influence in the global economy.

The PIF: An Overview

Image Credit The PIF

Established in 1971, the Public Investment Fund is a government-owned entity that aims to invest funds on behalf of the Kingdom of Saudi Arabia. The PIF has diligently worked to diversify the national economy and decrease Saudi Arabia’s dependence on oil revenues. 

The fund’s success in achieving its goals has earned it a prominent place among the world’s largest sovereign wealth funds.

The PIF has been involved in several major gigaprojects aimed at diversifying the country’s economy and fostering long-term sustainability. Some of these key gigaprojects, including NEOM, Red Sea Global, Qiddiya, Diriyah, and Roshn.

Impact on Saudi Arabia’s Economy

Image Credit KAFD

The PIF’s growth is a positive sign for Saudi Arabia’s economy, as it represents a significant influx of capital that can be invested in various sectors. The increase in PIF’s assets is expected to contribute significantly to key national projects and initiatives.

Furthermore, the growth of PIF aligns with Saudi Arabia’s Vision 2030, the Kingdom’s ambitious plan to diversify its economy and reduce its dependence on oil. PIF’s expansion plays a pivotal role in achieving these goals, as it helps fuel innovation, stimulate economic growth, and create jobs.

PIF’s Future Prospects

Saudi Arabias PIF Assets Rise to 0 Billion Making It Worlds Fifth Largest SWF
Image Credit KAFD

Looking ahead, the PIF has set ambitious goals for the future. As per the PIF’s five-year strategy, the target is to double the size of its assets to more than $1.07 trillion (SAR 4 trillion) by 2025. 

Crown Prince Mohammed bin Salman has further stated that the PIF aims to grow its assets to $2.7 trillion (SAR 10 trillion) by 2030.

The PIF’s Rise

The rise of Saudi Arabia’s PIF in the global SWF rankings is a testament to the fund’s strategic investments and the Kingdom’s broader economic diversification efforts. 

With its significant stake in Aramco and ambitious future targets, the PIF is well-positioned to continue its upward trajectory in the SWF rankings. As the fund grows and diversifies its investments, it will undoubtedly play an even more pivotal role in Saudi Arabia’s economic future.

The PIF: Top Global Wealth Fund Investor

Saudi Arabias PIF Assets Rise to 0 Billion Making It Worlds Fifth Largest SWF
Image Credit The PIF

The Public Investment Fund (PIF) of Saudi Arabia has become top global sovereign wealth fund investor globally in 2023. Notably, the PIF allocated an impressive $31.6 billion across 49 deals, marking a significant 33% surge from the previous year, 2022.

Surpassing the 2022 top investor, Singapore’s GIC, the PIF, has demonstrated its prowess in strategic investments.

Aligned with the objectives of Saudi Vision 2030 to reduce dependence on oil, the PIF’s extensive portfolio covers diverse sectors such as aviation, sports, gaming, electric vehicles, and luxury hotels.

The PIF’s Partnerships, Investments, and Ventures

The PIF and ATP Partnership

Image Credit The PIF

The Public Investment Fund of Saudi Arabia and ATP, the overseeing organization for men’s tennis, have revealed a multi-year strategic collaboration to enhance the global tennis landscape.

In this alliance, PIF will assume the role of the official ATP Rankings naming partner and become an official partner for ATP tournaments.

This partnership comes on after the appointment of Rafael Nadal as the ambassador for The Saudi Tennis Federation and the introduction of the 6 Kings Slam Tennis Tournament, scheduled to be held in Riyadh this October, featuring elite players like Novak Djokovic.

The PIF’s Electric 360 Partnership

Image Credit The PIF

The Public Investment Fund (PIF) of Saudi Arabia has recently entered into a multi-year collaboration named Electric 360, encompassing all three international electric Motorsport championships. 

This strategic alliance involves Formula E, Extreme E, and E1 Powerboat racing with the objective of catalyzing the global expansion of electric Motorsports.

Currently, the PIF has a 5% ownership in Formula E and a substantial 50% stake in Extreme E, focusing on off-road racing. As part of this partnership, thrilling races will be featured in Saudi Arabia, including the annual Formula E event held in the historic city of Diriyah.

The PIF’s Launch of ALAT

Image Credit The PIF

The Public Investment Fund has launched ALAT, a company intended to establish the Kingdom as a leading center for Electronics and Advanced Industries globally.

ALAT will focus on producing semiconductors, robotics, advanced computing systems, intelligent household appliances, and digital entertainment goods.

With ambitions to generate 39,000 employment opportunities, ALAT aims to bolster Saudi Arabia’s non-oil GDP by $9.3 Billion by the year 2030.

The PIF’s Magic Leap Investment 

Image Credit Magic Leap

The Public Investment Fund has made a significant investment of $590 million in Magic Leap, a U.S.-based company known for its expertise in immersive virtual reality headsets, directly competing with Apple’s Vision Pro. 

This strategic move coincides with the imminent release of Apple’s Vision Pro, priced at $3,499, further escalating the rivalry among Magic Leap, Meta, and Apple. 

With this considerable financial injection, Magic Leap’s total funding now surpasses $4.5 billion, positioning it for a potential technological revolution. 

The PIF’s RIG

Image Credit The PIF

Saudi Arabia has launched THE RIG, an innovative mega theme park inspired by oil rigs, situated 40 kilometers off the country’s eastern coast. 

Inspired by Saudi Arabia’s abundant oil and gas history, the theme park includes three hotels, 11 restaurants, helipads, a diving center, and an extreme sports adventure park.

The Oil Park Development Company is spearheading the project, backed by the Public Investment Fund. The estimated cost of this groundbreaking venture is projected to be $5 billion.

The PIF’s Stake in MEPCO

Image Credit The PIF

The Public Investment Fund of Saudi Arabia has successfully acquired a 23.08% stake in the Middle East Paper Company, also known as MEPCO.

This strategic acquisition is designed to provide substantial support for the expansion of MEPCO’s core. business, focusing on producing and recycling paper-based products across the Middle East and North Africa. 

Additionally, the move aims to extend the PIF’s influence in the construction sector by fostering the manufacture of specialized building materials, including gypsum. This strategic approach contributes to the development of local supply chains and reinforces Vision 2030’s broader objectives.

Keep Reading: Saudi Arabia’s PIF Emerges As Top Global Wealth Fund Investor in 2023 with Over $31 Billion in Deals

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