Photo: The Crown Prince of Saudi Arabia, Mohammad bin Salman, during the G20 meeting in Argentina on Nov 28, 2018. He is the chairperson of Saudi's Public Investment Fund.

Islamic Finance

$1.07 trn by 2025: Saudi sovereign fund aims high with new plan focused on domestic economy

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BY Staff Writer
28 Jan 2021
News
Salaam Gateway

Saudi Arabia’s sovereign wealth fund this week announced its aim to more than double assets under management to 4 trillion riyals ($1.07 trln) by the end of 2025.

This is the current size ($1.078 bln)  of Norway’s sovereign wealth fund, the biggest in the world.

Saudi’s Public Investment Fund said on Sunday (Jan 24) that assets under management in 2020 reached nearly 1.5 trillion riyals ($400 bln). This is three times more than what it held four years ago.

By 2030, the aim is to hold 7.5 trillion riyals ($2 trln) in assets under management.

PIF governor Yasir Al-Rumayyan said the fund’s return to shareholders doubled from around 3% between 2014-2016 to about 8% during 2018-2019, reported state news agency SPA on Tuesday (Jan 26).

A key feature of PIF’s 2021-2025 plan is to  pump in at least $40 bln a year into domestic projects and investments. The goal is to increase PIF’s local portfolio to 60% in the next five years.

Since 2015 when Crown Prince Muhammad bin Salman took over as head of the board, the PIF has committed to "giga" projects at home including the $500 bln new city NEOM, and headline investments abroad including in Japan's Softbank tech fund and big U.S. equities such as Uber.

KEY STATS SAUDI PUBLIC INVESTMENT FUND:

  • AuM 2020: 1.5 trln riyals ($400 bln)
  • AuM 2025 aim 4 trln riyals ($1.07 trln)
  • AuM 2030 aim 7.5 trln riyals ($2 trln)
  • 2 trln riyals in new projects from 2026 – 2030, for a cumulative 3 trln riyals in investments in new projects in the next 10 years

 

PIF identified 13 wide-ranging sectors as part of its core domestic strategy:

  1. Healthcare
  2. Utilities and renewables
  3. Telcos, media and tech
  4. Food and agriculture: PIF aims to “cement Saudi Arabia’s position as a hub for the halal industry and distribution centre to the world, leveraging current and new partnerships with leading players in food, pharmaceuticals, and cosmetics.”
  5. Automotive
  6. Transport and logistics
  7. Real estate
  8. Aerospace and defense
  9. Construction and building components and services
  10. Entertainment, leisure and sports: Creating new destinations, digitising gaming content
  11. Financial services: support growth to transform Saudi into a cashless comnunity
  12. Metals and mining
  13. Consumer goods and retail: Focus on noon.com as core e-commerce, plus fintech services, digital consumer services, digital entertainment and media, digital advertisements

PIF will also raise its share of investments in new sectors from 15% in 2020 to 21% this year, SPA reported Al-Rumayyan as saying. In its 2018-2020 programme, PIF identified new sectors to include establishing the Saudi Military Industries Company, the Saudi Recycling Company, and launching noon.com. 

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