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Saudi fund buys into US gaming and e-payments firms

Saudi PIF US firms Reuters/Matthew Tostevin
PIF accelerated its acquisition of shares in video games publisher EA early this year
  • Public Investment Fund ups value of US holdings by 14%
  • PIF increased its holdings in EA and PayPal
  • US holdings represent 6% of $620bn of assets under management

Saudi Arabia’s sovereign wealth fund has bought shares in gaming, electronic payment and alternative energy companies, increasing the value of its US holdings by 14 percent in the first three months of this year.

The total value of holdings held by the Public Investment Fund (PIF) in US listed companies was $35.52 billion as of March 31, its most recent filing to the US regulator shows. 

That is up from $30.9 billion at the end of 2022 but down from $43.49 billion a year earlier, according to AGBI calculations based on regulatory data that excludes the $40.3 million of debt securities PIF held in Carnival Corp, in addition to its stake in the cruise operator.

PIF had assets under management of $620 billion as of March 31, 2022, according to its website, meaning the US holdings represented just under 6 percent of its total value.

PIF, chaired by Crown Prince Mohammed bin Salman, is both an opportunistic and long term strategic investor in US equities.

The fund owns sizeable stakes in nascent, loss-making businesses such as ride hailing service Uber and electric vehicle manufacturer Lucid Motors, as well as in established companies in myriad industries including financial services and tourism.

In the first quarter of 2023 PIF tripled its holdings in Singapore-based e-commerce and gaming company Sea Ltd, but sold all its shares in ecommerce fashion retailer Farfetch.

Saudi PIFReuters/Hyunjoo Jin
PIF owns stakes in loss-making electric vehicle manufacturer Lucid Motors

The fund also bought into Californian hydrogen fuel cell manufacturer Bloom Energy Corp – Saudi Arabia is building an $8.5 billion green hydrogen plant that will be the world’s largest.

“This ties into Saudi’s broader investments in alternative energy and new technologies that it believes will be part of the economic and energy mix in future,” said Rachel Ziemba, founder of Ziemba Insights, a New York-based advisory firm. 

“That doesn’t mean Saudi thinks we’ll stop needing oil, but that it can co-exist with alternatives – it’s not an either-or situation.”

PIF’s last few US Securities and Exchange Commission filings show it has not made many new share purchases.

“There continues to be some relatively small investments, but not the big ones like before,” said Ziemba.

PIF nearly doubled its holdings in Electronic Arts (EA) over the 12 months to March 31 2023, taking its stake to $2.99 billion.

“PIF continues to invest in consumer technology sectors. It has been in and out of EA for a while but hasn’t invested much recently in the financial sector and banks, which was probably wise,” Ziemba said.

PIF also upped its holdings in PayPal more than eightfold year-on-year, with its stake in the payments company worth $569.3 million as of March 31.

The fund sold nearly one-third of its Visa shares over the same period and also divested entirely from Hyzon Motors.

“PIF is interested in different ecommerce (platforms),” said Ziemba, also highlighting its stake in Shopify.

Saudi’s PIF investments in US household names

Saudi PIFReuters/Dado Ruvi/Illustration
PIF upped its holdings in PayPal eightfold year-on-year
Company/brandValue by end of Q1 2023 ($m)
Lucid Group 8916.4
Electronic Arts                2988.1
Uber                            2309.0
Live Nation                     879.5
PayPal                           569.3
Fedex Corp                 257.6
Visa Inc                      215.2
Alibaba Group               105.8
Walmart                          116.5
Pinterest Inc               110.5
Adobe Inc                442.1
Zoom                              346.8
Costco                  515.0
Starbucks                      657.4
Microsoft                        532.06
Alphabet                     441.8
The Home Depot           484.5
BlackRock                  496.2
Salesforce Inc               529.46
JPMorgan Chase & Co     501.8
Amazon420.1

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