As Saudi Arabia ratchets up efforts to reshape itself, the government’s looked to the Public Investment Fund to lead the way. But an increased focus on domestic projects like the $1.5 trillion Neom has global asset managers fretting that it will have less cash to spend abroad.
While the fund plans to ramp up annual spending to as much as $70 billion, executives at three alternative investment firms have privately expressed concerns that the PIF will channel more money into local mega-projects. That could lead to a pivot away from passive investments in global private equity, infrastructure and hedge funds, people familiar with the matter said.
It's a stark shift from recent years, when wealth funds from the Middle East were eager to deploy billions of dollars with some of the world’s largest investors. The $925 billion PIF has been an especially prolific backer to the likes of BlackRock Inc. and Brookfield Asset Management.
Officials in the kingdom had looked to draw foreign investment to help pay for at least a portion of Crown Prince Mohammed bin Salman’s Vision 2030 agenda, but that money hasn’t rolled in as expected. That’s led to additional pressure on the PIF, which is the main entity tasked with driving the multi-trillion-dollar economic diversification plan.
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