Finance

PIF top spender among sovereign funds in 2023

January 1, 2024, 7:31 AM

A Human Horizons EV. PIF’s investment could potentially value the Shanghai-based company at $3bn — One of the Saudi sovereign wealth fund PIF's recent investments was in the Shanghai-based company Human Horizons, maker of electronic vehicles

Saudi fund spends $31.5bn
Abu Dhabi’s Mubadala second
Gulf funds’ holdings hit $4.1tn

Saudi Arabia’s sovereign wealth fund, Public Investment Fund (PIF), was the top spender worldwide among state-owned investors, the 2024 Global Sovereign Wealth Fund report has revealed, underlining the kingdom’s determination to reallocate its hydrocarbon revenues to diversify and expand its domestic economy.

State-owned investors include sovereign wealth funds (SWFs), public pension funds and central banks, the consultancy Global SWF said in its report, which was published on Monday.

The PIF ranked first globally in 2023 in terms of new money invested by state-owned investors,, having deployed $31.5 billion across 48 deals, the report said.

Abu Dhabi’s Mubadala ($17.5 billion) and Abu Dhabi Investment Authority (ADIA, $13.2 billion) were ranked third and fourth. Qatar Investment Authority (QIA, seventh, $5.9 billion) and Abu Dhabi’s ADQ (eighth, $5.8 billion) also made the top 10, meaning that together, the three Abu Dhabi-controlled funds invested $36.5 billion

“The inflow of international managers working in the region has accelerated,” the report said. “There have been rumours of rotation of CEOs at some of the largest funds in the region, and we believe some of them may finally happen in 2024.”

The PIF also made the three largest investments by sovereign funds in 2023. These were its $4.9 billion acquisition of the US gaming company Scopely, its $3.6 billion purchase of Standard Chartered’s aircraft leasing division and a deal to buy the steelmaker Hadeed for $3.3 billion from the state-controlled Saudi Basic Industries Corp (Sabic).

Gulf sovereign funds’ combined assets under management reached a record $4.1 trillion in 2023, the report estimated, up from $3.8 trillion in 2022 and $2.6 trillion in 2018.

“Gulf governments have aligned their SWFs with their geopolitical priorities, particularly in their regional backyard as they seek to bolster ties and integrate economies,” the report said.

“SWFs are central to delivering on multi-billion bilateral memoranda of understanding – grand ambitions launched in high profile visits, although investment rarely, if ever, reaches targets.”

The report described how Saudi Arabia, the UAE and Qatar have “engaged in what appears to be a bidding war for influence”, particularly in Egypt and Turkey.

“Egypt has been courting Gulf investment to stimulate inward investment, which has been limited due to the country’s yawning budget deficit, weak currency and high interest rates,” the report said.

ADIA is the world’s fourth largest SWF, with $984 billion of assets under management, the report said. Kuwait Investment Authority ($801 billion), PIF and QIA ($429 billion) are ranked fifth, seventh and eighth respectively, Global SWF estimated.

The ninth-placed fund, Investment Corporation of Dubai (ICD) has assets under management of $341 billion, while the Abu Dhabi duo Mubadala and ADQ are 11^th and 12^th with $276 billion and $199 billion respectively, the report said.

The three largest sovereign wealth funds globally are the Norwegian State Pension Fund, at $1.48 trillion, the China Investment Corporation at $1.24 trillion, and China’s SAFE Investment Corporation, at $1.09 trillion.

Worldwide, sovereign wealth funds’ assets under management will increase to $18 trillion in 2030, from an estimated $11.2 trillion in 2023, Global SWF forecast.

“Half of the funds are funded by commodity exports, so these figures will be highly dependent on oil prices,” the report said.