Saudi sovereign wealth fund splashes cash in 2023 – report shows

By Libby George

LONDON (Reuters) – Saudi Arabia’s Public Investment Fund accounted for about a quarter of the nearly $124 billion spent by sovereign wealth funds globally last year, according to a report published on Jan. 1.

PIF’s huge spending totals $31.5 billion in 2023, compared with $123.8 billion for all sovereign wealth funds, according to a preliminary annual report from industry specialist Global SWF, which tracks sovereign wealth funds. sovereign investments of the world.

The sharp rise in global stocks last year helped swell assets managed by sovereign wealth funds around the world to a record $11.2 trillion.

Total state-controlled spending on the energy transition – from green hydrogen to lithium mining – also hit 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 could be a sign of an overly cautious approach, as these institutions are not short of capital,” Diego López, managing director of Global SWF, said in the report.

Singapore’s GIC, which has dominated wealth fund spending for the past six years, invested 48% less in 2023, despite a $144 billion inflow from the country’s central bank.

Gulf funds have been able to increase their dominance in deals, largely at the expense of Canadian and Singaporean funds, according to the Global SWF report. Gulf funds now represent almost 40% of the investment value deployed by sovereign funds.

Data provided by groups such as Global SWF is closely watched, 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 SPORTS

The Global SWF report did not detail the Saudi PIF’s individual investments, but its lavish spending on football and golf has made waves across the sporting 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 Cristiano Ronaldo’s Al-Nassr.

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In June, Saudi Arabia stunned the golf world with a shock merger deal between the PGA Tour, DP World Tour and rival Tour LIV, backed by the Saudi PIF. This merger has not yet been finalized.

Aside from its sporting splurges, the Kingdom’s biggest investments have been made in other sectors and 42% of this spending has been made domestically.

Major purchases included $4.9 billion for US gaming company Scopely, $3.6 billion purchase of Standard Chartered’s aircraft leasing division and $3.3 billion for steelmaker Hadeed .

“The variety of agreements shows the unprecedented scope and scope of the PIF and its subsidiaries, which form a vast network to capture any added value for the Saudi Vision 2030,” López said, referring to the country’s economic transformation plan .

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 – part of plans to transform 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 2021 peak of $50.8 trillion. assets under management, taking into account paper gains. of the past year.

(Additional reporting by Marc Jones. Editing by Jane Merriman)