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Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is planning to reduce its share of international investments by about one-third. This decision marks the end of a decade characterized by substantial global spending, as the PIF shifts its focus towards the domestic economy. Currently overseeing approximately $930 billion worth of assets, the PIF aims to lower the proportion of its overseas investments from the existing 30% to a range of 18-20%.
At the Future Investment Initiative conference held in Riyadh, PIF governor Yasir al-Rumayyan highlighted that the fund initially centered its investments on domestic Saudi projects. Over time, the international investments increased to 30%. The current objective is to adjust this percentage down to the targeted range, though al-Rumayyan noted that the absolute dollar value of investments continues to rise. The PIF is targeting a milestone of $2 trillion in total assets under management by 2030.
As the PIF faces increasing pressure to meet its vast domestic commitments and generate returns, it has started imposing more conditions on fund managers’ mandates. The fund insists on seeing greater investment in Saudi Arabia before committing to new funds. It has already reduced its stake in companies such as BlackRock, Carnival, and Live Nation.
According to filings with the US Securities and Exchange Commission, the PIF’s US-traded stocks decreased from roughly $35 billion at the end of 2023 to $20.5 billion by March 31, stabilizing at $20.6 billion in the second quarter. The PIF forms a central component of Crown Prince Mohammed bin Salman’s strategic plan to diversify Saudi Arabia’s economy away from oil dependency.
Previously, the fund made headlines with notable deals, including a $45 billion investment in SoftBank’s Vision Fund in 2016 and a $20 billion investment in a Blackstone infrastructure fund in 2017. The PIF has also acquired significant assets, purchasing Newcastle United football club and financing the LIV Golf professional tour.
In addressing changes in the investment approach, al-Rumayyan mentioned that international investors are now more inclined to seek co-investment opportunities with the PIF instead of simply requesting investment capital. However, he did not specify a timeline for achieving the new international investment targets.