PIF’s Assets Grew 29% To $760 Billion As of 2023-End
Saudi Arabia’s sovereign wealth fund – The Public Investment Fund (PIF) – delivered significant growth and made strong progress towards the objectives of its vision realisation program (VRP) during 2023.
Across Saudi Arabia and around the world, PIF leveraged its scale, stature, reach and expertise to forge landmark partnerships, accelerate strategic sectors, and diversify its expanding asset base for continued growth and value creation, PIF said in its annual report for 2023.
With $760 billion in assets under management (AuM), an increase of 29% from $620 billion as of year-end 2022, PIF delivered on its growth mandate in 2023, PIF Governor Yasir Bin Othman Al-Rumayyan said.
According to him, since 2015, when PIF refocused its resources and expertise to become Saudi Arabia’s primary economic engine, it has propelled Saudi Arabia’s economic growth and diversification.
In less than a decade, it has launched five giga-projects that have captured the world’s imagination, created over 90 portfolio companies and championed the development of strategic sectors, ensuring a robust and diverse economic framework with an annual average investment of SAR 150 billion in the local economy.
“PIF’s multifaceted approach to economic development and diversification is built upon the eight strategic pillars of its VRP, which collectively maximize PIF’s impact and contribute to achieving Vision 2030’s second pillar of a prosperous economy,” he said.
Boost to Local Sectors
The VRP propelled local sectors by identifying and nurturing 13 strategic sectors critical to the domestic market. The program prioritised the five giga-projects’ development, while leveraging technology and knowledge to stimulate the economy and diversify beyond oil. PIF supports national development by enhancing supply chains, Saudisation and private-sector engagement.
On the global stage, PIF sought to diversify its assets through international partnerships and investments, aligning with global trends and diversifying wealth sources. Additionally, PIF fostered cooperation among its investment portfolios to create strategic value and improve sustainability and governance.
Through the effective execution of these priority areas, PIF ranked as the sixth largest SWF in the world by AuM as of year-end 2023, according to SWF Institute. PIF’s prominence on the world stage has continued to rise alongside its asset portfolio, in line with its expansion strategy and international growth ambitions.
This elevated standing was highlighted during the year as the Global SWF ranking of PIF rose 64 places from 71st the previous year to seventh globally as of year-end 2023, according to Global SWFs Governance, Sustainability and Resilience (GSR) rating.
The year 2023 offered significant growth and accelerated achievements across many of PIF’s strategic pillars and sectors domestically, including the unveiling of Diriyah Company as the fifth giga-project, the announcement of Riyadh Air as a new national airline and Lifera, an innovative investment company poised to transform Saudi Arabia into a premier hub for pharmaceutical manufacturing, and a new joint venture with Ma’aden, creating Manara Minerals, he said.
Furthermore, the newly announced New Murabba Development Company that will oversee the development of the world’s largest modern downtown in Riyadh, is complemented by the launch of Al Balad Development Company, dedicated to transforming the historic Jeddah district of Al Balad into a global tourist destination, he explained.
“These highlights are just a few examples of the many achievements involving the nation’s giga projects and PIF’s 200-plus portfolio companies across the Middle East and North Africa (MENA) region,” he noted.
Overall, total net cash returns for both Saudi Sector Development (SSD) and Saudi Equity Holdings (SEH) pools reached $11.19 billion for the year, substantially exceeding the $5.33 billion target.
“This performance contributed to 19.4% and 10.8% Total Shareholder Return (TSR) of the SSD and SHE pools, respectively since the VRP’s inception in 2017, both significantly ahead of 2023 targets,” he said.
The Saudi Real Estate and Infrastructure Development (SREID) pool increased 15% year-on-year to reach $62.10 billion in AuM and launched 12 new companies during the year.
With respect to PIF’s international pools and program, the total AuM reached $156.17 billion as of year-end 2023, an increase of 14.3% compared to the previous year, well ahead of its 2023 target.
Meanwhile, the International Diversified Pool (IDP) contributed to curating a well-balanced, risk-weighted portfolio across a diverse array of asset classes in Saudi Arabia and the world, and the International Capital Markets Program grew total AuM across its diversified portfolio to $50.64 billion.
PIF reinforced its sustainability credentials during the year 2023, raising $5.5 billion through its second international green bond issuance. The funds will finance or refinance eligible green projects, aligning with PIF’s Green Finance Framework and the Saudi Green Initiative.
Focus and Ambition
Building on the progress achieved over the first three years of the VRP 2021-2025, PIF is poised to deliver even greater economic impact.
PIF will maintain its strategic focus to develop and diversify Saudi Arabia’s wealth by continuing to invest locally to unlock the growth potential of the nation’s priority sectors, and internationally to expand and diversify its asset base.
PIF has set ambitious goals within its strategy, including: increasing its total AuM to approximately $1.07 trillion, driving PIF and its subsidiaries’ contribution to non-oil GDP to a cumulative $320 billion.
Additionally, PIF and its subsidiaries aim to contribute to 60% of local content and increase cumulative non-governmental investment to $320 billion, encompassing both local and foreign direct investments, he added.
