Saudi Public Investment Fund dominates global investments in 2023 with a $31.5 billion expenditure surge

A notable highlight is the record-breaking spending of $25.9 billion by sovereign-controlled funds on the energy transition, ranging from green hydrogen initiatives to lithium mining.

Saudi Arabia’s Public Investment Fund (PIF) emerged as a dominant force in the global financial landscape, accounting for approximately a quarter of the staggering $124 billion spent by sovereign wealth funds worldwide in 2023, as revealed in a preliminary annual report by industry specialist Global SWF.

The report underscores PIF’s remarkable $31.5 billion spending in 2023, a substantial portion of the $123.8 billion expended by sovereign wealth funds globally. The surge in global stock markets throughout the year contributed to a record-breaking $11.2 trillion in assets managed by sovereign wealth funds worldwide.

A notable highlight is the record-breaking spending of $25.9 billion by sovereign-controlled funds on the energy transition, ranging from green hydrogen initiatives to lithium mining. This emphasis on sustainable investments reflects a global commitment to environmental stewardship.

However, despite these remarkable figures, the total spending by sovereign wealth funds in 2023 registered a 21% decline compared to the previous year. Global SWF’s Managing Director, Diego López, suggested that this caution might indicate an overly conservative approach among these institutions, given the ample capital at their disposal.

Singapore’s GIC, which had led wealth fund spending for the past six years, notably reduced its investments by 48% in 2023, even with a substantial $144 billion inflow from the country’s central bank. Meanwhile, Gulf funds increased their dealmaking dominance, claiming nearly 40% of the investment value deployed by sovereign wealth funds, surpassing Canadian and Singaporean funds.

The report did not provide a detailed breakdown of individual investments by Saudi Arabia’s PIF. Still, it highlighted the fund’s extensive foray into the sports world, particularly in soccer and golf. In June, the PIF announced its control over four leading Saudi soccer clubs and initiated a shock merger agreement in the golf sector.

Beyond sports, PIF’s significant investments were diversified across sectors, with 42% of its spending focused domestically. Major acquisitions included a $4.9 billion investment in U.S. gaming company Scopely, a $3.6 billion acquisition of Standard Chartered’s aircraft leasing division, and a $3.3 billion investment in steelmaker Hadeed.

The report also shed light on PIF’s ambitious plans for the future, including launching its airline and electric vehicle brand. With an $8.1 billion stake in gaming giants Activision Blizzard, Electronic Arts, and Take-Two, the fund aims to position Saudi Arabia as a prominent gaming hub.

Looking ahead to 2024, Global SWF anticipates that assets for all state-owned investors, including sovereign wealth funds, central banks, and pension funds, will surpass the previous peak of $50.8 trillion in assets under management recorded in 2021, taking into account the substantial gains made in the past year.