Saudi Arabia’s sovereign wealth fund has been transforming almost as quickly as the country itself. In 2015, the Public Investment Fund, or PIF as it’s widely known, was a sleepy holding company for government investments that hardly anyone outside the kingdom had heard of. Now it’s closing in on $1 trillion in assets as it snaps up everything from soccer clubs to electric carmakers and bankrolls new cities in the desert. The shift underscores the urgency of its mission: to prepare the world’s biggest crude-exporting nation for a post-oil future.
1. What does PIF invest in?
Its biggest holdings are still in local businesses such as Saudi National Bank, Saudi Telecom Co. and national projects like Neom, a $500-billion city-state that would run entirely on renewable power and export green energy. Since 2016, when it committed $45 billion to SoftBank Group Corp.’s technology-focused Vision Fund, PIF’s foreign interests have mushroomed. A 2018 investment in electric carmaker Lucid Motors Inc. has soared in value to almost $40 billion. It also has stakes in video game makers Activision Blizzard Inc. and Electronic Arts Inc. and the digital services and retail businesses of Indian billionaire Mukesh Ambani. In February, the government transferred an $80 billion stake in Saudi state oil giant Aramco to PIF to boost its assets as the fund prepared to tap the international bond market for the first time.
Its biggest holdings are still in local businesses such as Saudi National Bank, Saudi Telecom Co. and national projects like Neom, a $500-billion city-state that would run entirely on renewable power and export green energy. Since 2016, when it committed $45 billion to SoftBank Group Corp.’s technology-focused Vision Fund, PIF’s foreign interests have mushroomed. A 2018 investment in electric carmaker Lucid Motors Inc. has soared in value to almost $40 billion. It also has stakes in video game makers Activision Blizzard Inc. and Electronic Arts Inc. and the digital services and retail businesses of Indian billionaire Mukesh Ambani. In February, the government transferred an $80 billion stake in Saudi state oil giant Aramco to PIF to boost its assets as the fund prepared to tap the international bond market for the first time.
2. What is the fund’s purpose?
To project Saudi influence and diversify the economy, a goal laid out by de facto ruler Crown Prince Mohammed Bin Salman under a plan known as Vision 2030. PIF’s job is to stimulate inward investment, develop new industries, bring the kingdom access to new technologies through its foreign investments and create jobs. It’s also helping to make Saudi Arabia more attractive to outsiders. In a country largely closed off to foreign tourists, and with entertainment a taboo until a few years ago, PIF is investing in luxury resorts, cinemas and entertainment complexes to lure more visitors (and to stop Saudis seeking fun abroad). It also does deals just to make money. When the coronavirus pandemic crashed markets in 2020, PIF invested $40 billion of currency reserves received from the central bank in a bet on a swift recovery. It sold most of those investments a few months later as stocks rebounded.
To project Saudi influence and diversify the economy, a goal laid out by de facto ruler Crown Prince Mohammed Bin Salman under a plan known as Vision 2030. PIF’s job is to stimulate inward investment, develop new industries, bring the kingdom access to new technologies through its foreign investments and create jobs. It’s also helping to make Saudi Arabia more attractive to outsiders. In a country largely closed off to foreign tourists, and with entertainment a taboo until a few years ago, PIF is investing in luxury resorts, cinemas and entertainment complexes to lure more visitors (and to stop Saudis seeking fun abroad). It also does deals just to make money. When the coronavirus pandemic crashed markets in 2020, PIF invested $40 billion of currency reserves received from the central bank in a bet on a swift recovery. It sold most of those investments a few months later as stocks rebounded.
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