Saudi Wealth Fund’s Assets Under Management Jump, Returns Dip

Saudi Arabia’s sovereign wealth fund solidified its position as one of the world’s biggest state-backed investors as assets surged last year, though returns dropped.

The Public Investment Fund’s assets under management rose 19% to $913bn at the end of last year, it said in an annual report published on Wednesday. Annualised returns since 2017 fell to 7.2%, down from 8.7% a year earlier.

The fund, chaired by Crown Prince Mohammed bin Salman, is a key vehicle for his efforts to reshape the Saudi economy and reduce its reliance on oil. As part of those efforts, the PIF deployed nearly $57bn across priority sectors last year, it said in the statement.

International investments made up 17% of its portfolio, down from around a fifth of total holdings last year.

That’s in line with PIF’s previously stated plan to reduce the share of global investments, though it has stressed that the absolute dollar value of overseas deals is expected to grow.

The PIF is helming the Vision 2030 agenda, which includes dozens of mega projects such as Neom in the kingdom’s northwest. That mission is becoming more challenging as the government runs fiscal deficits and reins in spending amid lower oil prices.

Earlier this year, the PIF said its net profit fell by more than half, hurt by high rates, inflation and impairments on some projects.

The fund diversified its funding sources last year, raising $9.83bn in public debt and an additional $7bn in private debt, according to the statement. Still, cash and cash equivalents at the end of the year dropped 5% to around $60bn.