“Saudi Arabia’s sovereign wealth fund scales back on global investments”

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), is planning to reduce the share of its international investments by about a third, signaling a shift towards focusing more on the domestic economy. With approximately $930 billion in assets, the PIF aims to decrease the proportion of funds invested overseas to between 18 and 20 percent, down from the current 30 percent. PIF governor Yasir al-Rumayyan announced this strategy at the Future Investment Initiative conference in Riyadh, highlighting the fund’s origins in domestic Saudi projects and its subsequent expansion into international investments.

Despite the planned reduction in the share of international investments, Rumayyan emphasized that the absolute dollar amount of investments is still growing. The PIF’s ultimate goal is to reach total assets under management of $2 trillion by 2030. As the fund faces pressure to deliver returns and meet its domestic commitments, it has been imposing more conditions on fund managers, prioritizing investments within Saudi Arabia.

In line with this new strategy, the PIF has already divested from certain international holdings, including stakes in BlackRock, Carnival, and Live Nation. Its traded stocks in the US decreased from about $35 billion at the end of 2023 to $20.5 billion in March 31, before stabilizing at $20.6 billion in the second quarter.

The PIF has been a key player in Saudi Crown Prince Mohammed bin Salman’s efforts to diversify the kingdom’s economy away from oil dependence. In the past, it made significant investments in high-profile deals such as SoftBank’s Vision Fund and Blackstone’s infrastructure fund. Additionally, the fund has made notable acquisitions like Newcastle United football club and has supported ventures like the LIV Golf professional tour.

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Rumayyan noted a shift in approach from international investors seeking funding from the PIF, with more emphasis now on co-investments in the domestic economy. The fund’s focus on achieving impactful initiatives within Saudi Arabia has led to a change in the type of partnerships and investments it pursues.

While Rumayyan did not specify a timeline for reaching the new target for international investments, the PIF’s strategic shift reflects a broader trend towards prioritizing domestic economic growth and sustainability.