2024-01-01 05:00:00
Saudi Arabia’s Public Investment Fund accounted for regarding a quarter of the roughly $124 billion spent by sovereign wealth funds around the world last year, according to a report released Jan. 1.
The $31.5 billion spent by the PIF in 2023 compares to the $123.8 billion spent by all sovereign funds, according to the preliminary annual report from sector specialist Global SWF, which tracks the evolution of sovereign investment funds around the world.
The sharp rise in global stocks last year helped push assets managed by sovereign wealth funds around the world to a record high of $11.2 trillion.
Total spending controlled by sovereign states for the energy transition – from green hydrogen to lithium mining – will also reach a record $25.9 billion in 2023, according to the report.
Despite this, total sovereign wealth fund spending last year was 21% lower than in 2022.
“This may be a sign of an overly cautious approach, as these institutions have no shortage of capital to put to work,” Diego López, managing director of Global SWF, said in the report.
Singapore’s GIC, which has dominated sovereign wealth fund spending for the past six years, invested 48% less in 2023, despite an influx of $144 billion from the country’s central bank.
The global sovereign wealth fund report shows that Gulf funds have been able to strengthen their dominant position in transactions, largely at the expense of Canadian and Singaporean funds. Gulf funds now represent nearly 40% of the value of investments deployed by sovereign funds.
Data provided by groups such as Global SWF is closely followed, as not all sovereign wealth funds publish annual reports, and five of the top ten do not reveal their exact total assets under management.
GAMES AND SPORT
The Global SWF report does not detail Saudi Arabia’s PIF’s individual investments, but its lavish spending on football and golf has made waves in the sports world.
In June, Saudi Crown Prince Mohammed bin Salman announced that the PIF would take control of the country’s four main football clubs, Al-Ittihad, Al-Ahli, Al-Hilal and Al-Nassr from Cristiano Ronaldo.
In June, Saudi Arabia stunned the golf world by striking a merger deal between the PGA Tour, the DP World Tour and rival Tour LIV, which is backed by the Saudi PIF. This merger has not yet been finalized.
In addition to its spending on sports, the Kingdom’s largest investments have been made in other sectors and 42% of this spending has been made within the country.
Significant purchases include $4.9 billion for US gaming company Scopely, $3.6 billion for the purchase of Standard Chartered’s aircraft leasing division and $3.3 billion for the steelmaker Hadeed.
“The variety of transactions shows the unparalleled bandwidth and reach of the PIF and its subsidiaries, which form a wide net to capture any added value for Saudi Vision 2030,” Mr. López said, referring to the economic transformation plan from the country.
The Global SWR report also highlights PIF’s plans to launch an airline and its own brand of electric vehicles. The report said the fund holds an $8.1 billion stake in gaming companies Activision Blizzard, Electronic Arts and Take-Two, as part of plans to turn the country into a gaming hub.
By 2024, Global SWF expects the assets of all public investors – including sovereign wealth funds, central banks and pension funds – to surpass the previous high reached in 2021 of 50.8 trillion dollars in assets under management, taking into account last year’s paper gains.
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