PIF set to have $2 trillion in assets under management by 2030: report

In just eight years since its restructuring, the Saudi fund has become a dominant force both domestically and internationally, with the aim of advancing Vision 2030 and achieving the status of the world’s largest sovereign wealth fund by the end of the decade. (SPA)
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Updated 28 April 2024
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PIF set to have $2 trillion in assets under management by 2030: report

  • In March 2024, PIF’s assets under management surpassed $925 billion, up from $700 billion at the end of 2022

RIYADH: Saudi Arabia’s Public Investment Fund is poised to reach $2 trillion in assets under management by 2030, propelling it from 5th to 2nd place globally among sovereign wealth bodies, according to Global SWF.

The organization that monitors activity in this area stated that PIF’s rapid ascent can be attributed to the fund’s focus on  direct investments, emphasis on  key sectors of the Saudi economy, dedication to sustainability  through leading investments in  renewables and green assets, and active participation in the digital economy.

The institute’s 2024 annual report disclosed that in 2023, PIF took the lead as the top investor among all sovereign wealth funds, allocating $31.6 billion across 49 deals – a 33 percent increase from the prior year. 

This progress elevated the fund by 10 positions between global sovereign investors in new capital deployed within a mere three years.

In just eight years since its restructuring, the Saudi fund has become a dominant force both domestically and internationally, with the aim of advancing Vision 2030 and achieving the status of the world’s largest sovereign wealth fund by the end of the decade.

In March 2024, PIF’s assets under management surpassed $925 billion, up from $700 billion at the end of 2022, securing its position as the fifth largest global sovereign wealth fund, after the government transferred an additional 8 percent stake in Aramco to its portfolio.

The fund strategically delved into co-investments and forged joint ventures to bolster Saudi Arabia’s drive for economic diversification. 

Noteworthy examples include partnerships with mining giant Ma’aden, tire makers Pirelli, and car manufacturer Hyundai.

This was alongside an agreement with Baosteel and Aramco for the construction of a steel mill. 

The report highlighted that unlike numerous sovereign wealth funds that frequently choose co-investing as their primary strategy, both globally and in the Gulf region, PIF stands out with a strong preference for direct investments in private equity.

Specifically, it targets critical sectors of the Saudi economy, including sports and leisure, tourism, and gaming, as well as construction, and heavy industry.

Despite the clear advantages that co-investing offers – such as enhanced due diligence, favorable fee terms, and portfolio diversification – some sovereign investors may shy away due to concerns about deal visibility and relinquishing transaction control to other government funds.

According to the report, PIF stood out from other funds due to its substantial domestic investments, which significantly impacted its international investment capacity relative to other funds.

In 2023, Saudi Arabia’s sovereign wealth fund saw an 18 percent growth in its US equities portfolio, driven by rising stock values. 

PIF maintained a passive approach, keeping major positions unchanged. 

According to the report, its largest holding remained a 63 percent stake in Lucid Motors. 

PIF initiated its investment of $1 billion in the electric vehicle rival to Tesla back in 2018, and following Lucid’s initial public offering three years later has continued to infuse capital into the company.

This included an injection of $2 billion in June 2023, and Lucid is on course to commence EV production in Saudi Arabia by 2025.

PIF’s US-listed portfolio includes $8.1 billion in gaming companies such as Activision Blizzard, Electronic Arts, and Take-Two, reflecting the Kingdom’s plan to invest $38 billion to become a hub for this sector as part of Vision 2030.

In its report, Global SWF discussed the challenges encountered by sovereign investors in recent years and the corresponding solutions they implemented in 2023 to enhance the resilience of their portfolios.

One significant challenge involved addressing the decarbonization of the global economy. This was tackled through the introduction of a new sustainable investment strategy, shedding light on “climate alpha.” This typically refers to investments or strategies that aim to address global warming and its associated risks and opportunities.

This could include investments in companies or projects that are focused on renewable energy and efficiency, sustainable agriculture, clean transportation, and other environmentally friendly initiatives.

Sovereign investors showcased their dedication to sustainability during COP28, highlighted by the UAE’s launch of a $30 billion climate-focused fund, supported by BlackRock and fellow state-backed wealth funds. The goal is to access these areas while also greening existing black assets through de-carbonization.

Meanwhile, Saudi Arabia has taken a leading role in direct investments within the EV and automotive sectors. As well as its stake in Lucid, the Kingdom launched its own EV carmaker, Ceer, in a joint venture with Taiwan’s Foxconn. 

Further partnerships include collaborations with Tasaru for component localization, Hyundai for a car plant, and Pirelli for tire manufacturing.

According to Global SWF, sovereign investors directed a record $26.1 billion towards green assets in 2023, prioritizing investments in the energy transition, including renewables, battery storage, and EVs.

Gulf sovereign wealth funds contributed nearly half of this sum, leading the charge in driving the energy transition agenda.

The report also underscored another challenge encountered by sovereign funds, which is market volatility and the risks stemming from geo-economic fragmentation.

To tackle this issue, fund investors have embraced a more comprehensive total portfolio strategy. This strategy integrates alpha and beta return drivers, merging top-down and bottom-up analyses, with a significant emphasis on diversification.

By adopting this holistic approach, investors gain a thorough understanding of their investments, facilitating more informed decision-making, enhanced risk management, and the opportunity to optimize portfolio performance by focusing on the unique attributes and dynamics of each component within the portfolio.

The rise of disruptive artificial intelligence was also addressed in the report, which noted it represents a significant risk for sovereign investors as it can lead to rapid changes in industries, markets, and investment landscapes.

AI-powered technologies can impact traditional business models, alter consumer behavior, and introduce new competitive dynamics. To address this challenge, one proposed solution by sovereign investors is to integrate AI-powered portfolios into their investment strategies.

By incorporating AI technologies into portfolio management, sovereign funds can leverage advanced algorithms and data analytics to gain valuable insights. 

AI-powered portfolios can analyze vast amounts of data in real-time, identifying trends, patterns, and market signals that may not be immediately apparent to human analysts. This can lead to more accurate risk assessments, better market timing, and enhanced investment decision-making.

Additionally, AI can enable sovereign investors to automate certain aspects of portfolio management, such as rebalancing, trade execution, and risk monitoring. This not only increases operational efficiency but also allows for more agile responses to changing market conditions.

According to the report, 2023 saw sovereign wealth funds adjusting their real estate investments amidst concerns of global interest rate hikes and a potential property bubble.

Despite an overall softening in the market, some segments, such as data centers and affordable housing, saw growth as fund investors aligned with emerging megatrends. Data center investments surged by 150 percent to $7.6 billion in 2023, indicating a strong focus on future-oriented assets.

This shift reflects a move from traditional investments to a more sophisticated strategy, exemplified by PIF’s forming partnerships to develop data centers.

The report flagged up that in 2023, the GCC region – led by the Abu Dhabi Investment Authority, Abu Dhabi’s Mubadala, ADQ, PIF, and the Qatar Investment Authority – saw a record surge in sovereign capital to $4.1 trillion in assets under management, with transactions totaling $82.3 billion.

Projections indicate these sovereign wealth funds could reach $7.6 trillion in assets by 2030. This growth, according to the report, is fueled by high oil prices and a maturing investment landscape, driving economic diversification with growth forecasts of 3.6 percent and 3.7 percent for GCC nations in 2024 and 2025.

In this region, two distinctive sovereign wealth fund management approaches were highlighted by Global SWF. 

Abu Dhabi’s strategy involves the establishment of multiple SWFs, each with specific missions overseen by different royals. Saudi Arabia, on the other hand, centralizes its investment and strategic efforts under PIF, aligned with the government’s overarching vision.

Further, its leaders have no problems in announcing grand plans for the fund, using it in its name to buy football clubs or golf leagues, and in sharing its finances publicly given its fundraising efforts, in a rather refreshing fashion, the report said.

The institute presented updated projections in the State-Owned Investors 2030 section, factoring in the industry’s recovery in assets under management in 2023. 

It anticipates that public pension funds and central banks will reach $54.9 trillion by 2025 and $71 trillion by 2030. By then, Norway’s Norges Bank Investment Management, Saudi’s PIF, and Japan’s Government Pension Investment Fund could lead the table with over $2 trillion in assets under management each.


PIF-backed AviLease delivers three A320neo aircraft to SDH Wings

Updated 18 March 2025
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PIF-backed AviLease delivers three A320neo aircraft to SDH Wings

RIYADH: AviLease, an aircraft leasing firm owned by the Public Investment Fund, has delivered three Airbus A320neo aircraft to SDH Wings.

SDH Wings is a joint venture between the Saudi firm and the Chinese sovereign fund, where the Kingdom holds a 10 percent stake.

According to a press release, the three new aircraft will be leased long-term to a Saudi-based airline. With this latest addition, SDH Wings now owns a total of 25 aircraft.

Launched in 2022 by PIF, AviLease was created to harness the potential of promising sectors within Saudi Arabia, aiming to drive economic diversification and contribute to the growth of the non-oil GDP.

“This delivery represents a significant milestone in our relationship with SDH Wings. We are proud to support their expansion with these state-of-the-art aircraft,” said AviLease CEO Edward O’Byrne.

This delivery also signals a new phase in the collaboration between AviLease and SDH Wings, following a broader memorandum of understanding to acquire 20 additional, predominantly next-generation aircraft.

Under this agreement, AviLease will further assist SDH Wings in expanding its fleet while strengthening its partnership with Sichuan Development International Holdings, the majority shareholder of SDH Wings.

“By leveraging AviLease’s expertise in leasing and financing modern, fuel-efficient aircraft, SDH Wings is well-positioned to capitalize on emerging opportunities in the aviation financing market,” said the press release.

In October 2024, AviLease acquired nine aircraft from global lessor Avolon, building on the successful purchase of 13 aircraft from Avolon in 2023.


Alphabet to buy cybersecurity startup Wiz for $32bn

Updated 18 March 2025
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Alphabet to buy cybersecurity startup Wiz for $32bn

NEW YORK: Google owner Alphabet will buy cybersecurity firm Wiz for $32 billion — in a deal set to boost the tech giant’s in-house cloud computing amid burgeoning artificial intelligence growth.

If closed, the-cash transaction, announced on Tuesday, will become Google’s most expensive acquisition in the company’s 25-year history. The purchase gives Google new momentum in its efforts to compete in the cloud-computing business by offering more security for its services.

“Wiz and Google Cloud are both fueled by the belief that cloud security needs to be easier, more accessible, more intelligent, and democratized, so more organizations can adopt and use cloud and AI securely,” Wiz CEO Assaf Rappaport said in a blog post.

The company says Wiz will join Google Cloud — and that this deal represents a company investment “to accelerate two large and growing trends in the AI era: improved cloud security and the ability to use multiple clouds.”

Google CEO Sundar Pichai said in a statement, Google Cloud and Wiz “will turbocharge improved cloud security and the ability to use multiple clouds.”

Assaf Rappaport, co-founder and CEO, added that the deal will “bolster our mission to improve security and prevent breaches by providing additional resources and deep AI expertise.”

Wiz, based in New York, was founded in 2020, makes security tools designed to shield the information stored in remote data centers from intruders.

Google has had its eyes on Wiz for some time. The purchase price announced Tuesday surpasses a reported $23 billion buyout proposal that Wiz rejected last July.

The proposed buyout will get a close look from antitrust regulators. While many expect the Trump administration to be more friendly to business deals, it has also shown skepticism of big tech.

Also, the new Federal Trade Commission Chair Andrew Ferguson has vowed to maintain a tough review process for mergers and acquisitions.


Closing Bell: Saudi main index closes in red at 11,792

Updated 18 March 2025
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Closing Bell: Saudi main index closes in red at 11,792

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped on Tuesday, as it shed 90.64 points or 0.76 percent to close at 11,792.40. 

The total trading turnover of the benchmark index was SR5.94 billion ($1.58 billion), with 52 stocks advancing and 192 declining. 

The Kingdom’s parallel market, Nomu, also shed 315.76 points to close at 30,718.93. 

The MSCI Tadawul Index declined by 0.73 percent to 1,492.90. 

The best-performing stock on the main market was Aldawaa Medical Services Co. The firm’s share surged by 9.55 percent to SR78. 

The share price of Saudia Dairy and Foodstuff Co. also increased by 3.70 percent to SR313.60. 

Walaa Cooperative Insurance Co. also saw its stock price edging up by 3.62 percent to SR19.48. 

Conversely, the share price of Fawaz Abdulaziz Alhokair Co., also known as Cenomi Retail declined by 7.21 percent to SR11.84. 

On the announcements front, Derayah Financial Co., which debuted on Saudi Arabia’s main market on March 10, said that its net profit for 2024 reached SR443.9 million, representing a rise of 34.64 percent compared to 2023. 

The company attributed the rise in profit to significant growth across the company’s various business segments which include brokerage, asset and wealth management, as well as special commission income.

The share price of Derayah Financial Co. declined by 3.25 percent to SR38.70. 

Canadian Medical Center Co. announced that its net profit for 2024 stood at SR10.26 million, down by 34.63 percent from 2023. 

In a Tadawul statement, the firm said that the decline in net profit was due to higher operating and investment costs. 

Canadian Medical Center Co.’s board of directors also approved the payment of a cash dividend at 5 percent or SR0.05 per share for 2024. 

The company’s share price dropped by 0.58 percent to SR6.86. 

Elm Co. announced that its shareholders approved the firm’s acquisition of the shares held by the Public Investment Fund in Thiqah Business Services Co. for SR3.4 billion. 

The approval follows a share purchase agreement signed by Elm Co. and PIF in January to acquire the sovereign wealth fund’s entire stake in Thiqah, amounting to 45,000 shares. 

Elm Co. Saw its share price decline by 1.42 percent to SR971. 

Saudi Arabia’s Capital Market Authority approved the request of Marketing Home Group Co. to float 4.8 million shares in the Kingdom’s main market for an initial public offering. 

The offer shares amount to 30 percent of Marketing Home Group Co.’s share capital. 

The CMA also approved the application of Qudra Communications & Information Technology Co. to float 5 million shares, or 18.8 percent of the firm’s capital, on Nomu. 

Hawyia Auctions Co. also received approval from CMA to float 2.4 million shares, or 12 percent of the company’s capital, on Nomu. 

CMA added that the prospectus for these potential IPOs will be published well in advance of the offering’s start date. The authority’s approval is valid for six months from its resolution date.


How Saudi banks’ solid risk management counters liquidity pressures 

Updated 18 March 2025
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How Saudi banks’ solid risk management counters liquidity pressures 

  • Banks maintained profitability despite rising funding costs, fueled by intensified deposit competition and increased reliance on external borrowing
  • Alvarez & Marsal highlighted strong credit quality as a key factor supporting profitability in 2024

RIYADH: Saudi Arabia’s banking sector demonstrated resilience in 2024, supported by strong asset quality, improved cost efficiency, and disciplined credit management, according to Alvarez & Marsal. 

Arab News analysis of the A&M KSA Banking Pulse 2024 report found that banks maintained profitability despite rising funding costs, fueled by intensified deposit competition and increased reliance on external borrowing. 

This assessment relies on key financial ratios outlined in the report, including cost-to-income and loan-to-deposit, as well as net interest margin — indicators of how banks are navigating cost structures, liquidity pressures, and profitability. 

The A&M report came alongside a separate analysis from Fitch Ratings, which suggests that lower interest rates have had a mixed impact on earnings by banks in the Kingdom.

As Saudi Arabia accelerates economic diversification, the banking sector remains a key pillar of Vision 2030. Shutterstock

“Saudi banks’ performance metrics, particularly net interest margins, will see only limited improvement from the interest rate cuts that began in 2024, due to the prolonged tightening of liquidity conditions and strong competition for funding,” the agency said.

While rate cuts support loan growth, which boosts income from higher credit volumes, intense competition for liquidity is squeezing margins. Banks are reducing lending rates to stay competitive while maintaining attractive deposit rates to secure funding. 

Strong asset quality 

Alvarez & Marsal highlighted strong credit quality as a key factor supporting profitability in 2024. 

The non-performing loan ratio improved by 18 basis points to 1.1 percent, reflecting better risk management and healthier loan portfolios. Meanwhile, loan loss coverage remained solid at 161 percent, ensuring a strong buffer against defaults. The cost of risk also improved to 0.3 percent, indicating lower impairments and higher-quality lending. 

These improvements directly boosted bank earnings. Lower impairment charges allowed banks to retain more profits rather than setting aside funds for bad loans. 

With a larger share of performing loans and reduced provisioning costs, banks strengthened their bottom lines despite margin pressures.   

As Saudi Arabia accelerates economic diversification, the banking sector remains a key pillar of Vision 2030, driving financing for mega-projects, corporate expansion, and capital market growth. Banks are at the forefront of private sector investment, reinforcing their role as vital enablers of the Kingdom’s transformation. 

Beyond traditional lending, Saudi banks play a pivotal role in capital markets, contributing significantly to liquidity and investment activity. Banking stocks are among the most actively traded on the Saudi Stock Exchange, often driving market turnover. 

Saudi banks are also expanding their footprint in the debt market, with sukuk issuances and other financial instruments increasingly funding large-scale projects. 

Deposits rebounded by SR40 billion in January, fully offsetting the fourth-quarter drop. Shutterstock

Efficiency gains drive profitability 

Saudi banks demonstrated strong cost management in 2024, according to A&M, optimizing operational expenses while maintaining revenue growth. 

This resulted in a 63 basis point improvement in the cost-to-income ratio, which fell to 31.3 percent, reflecting greater efficiency in generating income relative to costs.  

The improvement reflects banks’ strategic focus on digital transformation, automation, and expense management — ensuring sustainable, long-term growth despite rising funding costs and liquidity pressures. 

Cost optimization efforts contributed to a 9.3 percent year-on-year growth in operating income, outpacing the 7.1 percent rise in operating expenses. This operational discipline boosted profitability, leading to a 13.5 percent rise in aggregate net income, reaching SR79.6 billion in 2024. 

Key contributors to this annual growth included a SR7.9 billion increase in net interest income, SR2.6 billion in net fee and commission income, and SR1.6 billion in other operating income, according to the report. 

However, net interest income growth slowed to 7.6 percent year-on-year in 2024, down from 11 percent in 2023, primarily due to higher funding costs.  

Despite narrowing net interest margins, banks leveraged rising fee-based income and cost efficiencies, maintaining a stable earnings outlook. The sector’s ability to navigate tightening liquidity while staying profitable underscores its strategic adaptability. 

Rising funding costs  

The rise in funding costs for Saudi banks is driven by both local liquidity constraints and global financial trends. As deposit growth lags behind credit expansion, banks are increasingly turning to alternative funding sources to sustain lending activity. 

A key factor behind this deposit gap is the dominance of government-related entity deposits, which account for about one-third of total sector deposits, according to Fitch Ratings. 

During the high-interest rate cycle, GREs moved funds into banks offering higher returns, rather than holding them at the Saudi Central Bank, also known as SAMA. 

Saudi banks play a pivotal role in capital markets, contributing significantly to liquidity and investment activity. Shutterstock

The introduction of SAMA’s deposit auction platform accelerated this shift, with GRE deposits at the central bank dropping from SR670 billion in 2023 to SR460 billion in early 2025. 

However, as rates began to decline, GRE inflows slowed. In the fourth quarter of 2024, Saudi banks saw a rare SR27 billion — or 1 percent — decline in deposits, the first drop since 2019, according to Fitch Ratings. The agency attributed this to seasonal budget and tax-related outflows from GREs.  

Despite this, deposits rebounded by SR40 billion in January, fully offsetting the fourth-quarter drop. 

While deposits recovered, their growth lagged behind lending expansion, which surged 14.4 percent year on year in 2024 — significantly outpacing the 7.9 percent rise in deposits, according to the A&M report. 

This pushed the loan-to-deposit ratio to 104.7 percent, surpassing the 100 percent mark for the first time in recent years.  

Corporate lending remains the primary driver, fueled by Vision 2030 mega-projects, infrastructure development, and private sector investments. 

With rising corporate financing needs, banks have diversified their funding sources, leaning more on sukuk issuances, external borrowings, and interbank lending to bridge liquidity gaps. While essential, these instruments come with higher costs than traditional deposits, pushing funding expenses higher.   

Impact of monetary policy  

The monetary policy shift has contributed to liquidity pressures. The US Federal Reserve’s 100 basis point rate cut in 2024 prompted SAMA to lower its repo rate to 5 percent, aligning with the riyal’s dollar peg. 

Despite this easing, funding costs remain high due to a lag effect — banks are still carrying higher-cost deposits and debt issued during the peak rate period. 

With loan growth projected to outpace deposits in 2025, Fitch forecasts banks will increase non-deposit funding, with debt issuance expected to exceed $20 billion. However, competition for liquidity and the dilution of current and savings accounts may offset the benefits of lower rates on net interest margins. Banks will need to carefully manage their funding mix to sustain profitability. 

Fitch also warned that tightening liquidity and increased reliance on external funding could pressure some banks’ funding and liquidity scores. However, a one-notch downgrade is unlikely to affect their overall Viability Ratings. 

As Saudi banks navigate these challenges, they are expected to focus on optimizing funding strategies, expanding capital market access, and leveraging long-term debt instruments to fuel lending growth while controlling funding costs.


$1.06bn deal signed to launch new logistics zone in Riyadh’s Falcon City

Updated 18 March 2025
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$1.06bn deal signed to launch new logistics zone in Riyadh’s Falcon City

  • Deal aims to strengthen the Kingdom’s position as a global logistics hub
  • Zone will serve as a comprehensive hub catering to the increasing demand for custom-designed warehouses

RIYADH: A new SR4 billion ($1.06 billion) logistics zone will be created within Falcon City in northern Riyadh, after a deal between Saudi firms SAL and Sela Co.

The development will provide integrated infrastructure combining Class A warehouses, multimodal connectivity, and smart logistics technologies to enhance supply chain efficiency and facilitate the faster movement of goods locally and regionally. 

The deal, which aims to strengthen the Kingdom’s position as a global logistics hub, is backed by the Private Sector Partnership Program, also known as Shareek.

The agreement comes as the Kingdom plans to invest more than SR1 trillion in the logistics sector by 2030, with the number of facilities already up by 267 percent since 2021.

Commenting on the Falcon City deal, Omar bin Talal Hariri, CEO of SAL, said: “The SAL Logistics Zone is not just a development project — it is a model for the future of integrated logistics services. 

“We are leveraging technology and sustainability to create an advanced operational environment that attracts investment and supports the Kingdom’s economic growth.” 

The partnership for the 1.5 million sq. meter logistics zone was signed in Riyadh in the presence of Minister of Transport and Logistics Services Saleh Al-Jasser, Minister of Investment Khalid Al-Falih, and CEO of the Shareek Program Center Abdulaziz bin Abdulrahman Al-Arifi, along with senior officials, investors, and business leaders. 

The zone will serve as a comprehensive hub catering to the increasing demand for custom-designed warehouses.

“Falcon City is more than just a development project; it is an integrated economic destination aimed at providing a modern business environment that supports multiple industries,” Rakan Al-Harthy, managing director of Sela, said.

He further emphasized that the partnership with SAL Logistics Services will facilitate the establishment of state-of-the-art facilities that cater to local and international companies and enhance business and investment flow.

This logistics zone significantly enhances the company’s capabilities due to its strategic location near King Khalid International Airport, major highways, and railway networks. 

Falcon City spans 14.4 million sq. meters and will feature the Riyadh Exhibition and Convention Center, as well as a modern logistics zone designed to attract major global companies, an aviation runway, and an aircraft maintenance hub.

The development also includes economic, commercial, and residential zones, as well as hospitality and entertainment areas and an outlet mall.

This strategic partnership directly supports Saudi Vision 2030 by enhancing logistics connectivity, stimulating local and international investments, and developing modern infrastructure to attract businesses and investors.

It also reinforces the Kingdom’s role in regional and international trade, driving sustainable economic growth and positioning the country as a leading logistics powerhouse.