The Public Investment Fund (PIF), Saudi Arabia’s $1-trillion sovereign wealth fund, will unveil by the end of the year its new long-term strategy on how it would support the Kingdom’s economy and diversified it from oil, and increase returns on investments, the fund’s governor has said.
“In the coming two months or so, we will set the new strategy for the PIF, which is a continuation from the original one, until 2030 and from 2030 all the way to 2040 and beyond,” Yasir Al Rumayyan, governor of PIF, told
David Rubenstein in an interview at the Economic Club of Washington D.C.
PIF, which ended 2024 with assets under management (AuM) increased by 19% to $913 billion, has boasted an annual average total portfolio return of 7.2% since 2017.
“Total revenue increased by 25%, and cash balance remains strong and broadly unchanged year on year as PIF maintains its robust liquidity,” PIF said last month in its 2024 annual report.
PIF says it is developing a portfolio of high-quality domestic, regional and international investments diversified across sectors, geographies, and asset classes.
About 80% of the fund’s investments are in Saudi Arabia, including in the so-called Giga-Projects designed to boost the domestic economy. These projects include the smart city of the future, Neom, and the world’s most ambitious regenerative tourism project, Red Sea Global.
However, the strategy may need tweaks and shifts as lower oil prices this year have strained the budget and oil income of the world’s biggest crude oil exporter.
Last month, reports emerged that PIF had written down $8 billion from the value of the Saudi megaprojects over the past year as they struggle to move forward amid budget overruns combined with weaker oil prices.
According to a Financial Times report that cited an unnamed source, PIF’s investments in projects, including the smart city Neom, at the end of 2024 were worth the equivalent of $56 billion. This was down by 12.4% from the previous year, the report said.
By Charles Kennedy for Oilprice.com
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