According to the reports, Saudi Arabia’s sovereign wealth fund accounted for nearly a quarter of the total $124 billion spent by all the sovereign wealth funds cumulatively in the world in 2023.
PIF’s massive $31.5 billion investments in 2023 compared takes up a big chunk of the total $123.8 billion spent by all the sovereign wealth funds globally, as extracted from a preliminary report published by Global SWF.
The main reason behind PIF’s growth was the strong rally in the stock markets witnessed in 2023, which increased the total assets under management by all funds to a record $11.2 trillion
The sovereign funds invested heavily in the energy transition sector – everything from lithium mining to green hydrogen – with a total spend of $25.9 billion. Despite these record figures, the total spending by the sovereign funds remained 21% less than the investments made in 2022.
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What Does this mean?
Regardless of the heavy spending done by the Saudi Public Investment Fund and other sovereign wealth funds in 2023, the total investments remained 21% lower than the previous year, giving some serious signals in the market.
Managing Director at Global SWF, Diego López said that, “this may signal an overly cautious approach, as there is no shortage of capital to put to work among these institutions.”
As per the figures released on Monday, Singapore’s GIC, which has led spendings by sovereign wealth funds for the past 6 years, spent nearly 48% less in 2023, despite a whopping $144 billion inflow from the central bank of the country.
Sovereign funds in the gulf region made inroads as the dominant deal makers in 2023, as the Singaporean and Canadian funds remained low. This reflects in the data as the Gulf funds now account for nearly 40% of the investment value handled by sovereign wealth funds.
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Sports and Gaming Spending
Although the Global SWF’s report didn’t mention the individual breakdown of each sector made by Saudi Arabia’s PIF, the country had been spending lavishly on golf and soccer which has surprised many people across the globe.
In June 2023, Saudi crown prince, Muhammad Bin Salman announced that Saudi PIF would take control of the four leading soccer clubs in the country, namely Al-Nassr, Al-Ahli, Al-Ahli, and Al-Ittihad.
The Saudis golfing decisions also made rounds in June with a shock merger agreement between DP World Tour, PGA Tour, and rival LIV circuit, backed by Saudi’s sovereign fund.
Besides this, the next big spending coming from the oil rich country included $4.9 billion in gaming company Scopely, $3.3 billion for steel producer Al-Hadeed and $43.6 billion in the standard chartered aircraft leasing division.
López said that, “the variety of deals made by the Saudis shows the unparalleled bandwidth and reach of PIF and its subsidiaries, which are forming a wide net to capture any value-add for Saudi Vision 2030.”
The Global SWF report also highlights that PIF is planning to launch its own electric vehicle brand and an airline. Looking ahead in the year 2024, the Global SWF expects assets held by all state-owned investors to surpass the previous peak of $50.8 billion, last reached in 2021.