The Public Investment Fund (PIF), Saudi Arabia’s initiative for diversification away from oil, finds itself in an aggressive growth phase with significant investments in tech, airlines, and sports. Now, the country’s centerpiece, Crown Prince Mohammed bin Salman, has generously bestowed upon the PIF a staggering $163 billion stake in Saudi Aramco, one of the globe’s most profitable public entities.
On Thursday, the transferring of an 8% stake in Saudi Aramco, a key element in Saudi Arabia’s wealth creation, was officially wrapped up and deeded to the PIF, according to official reports. This 8% portion evaluates to $163 billion that mirrors Uber’s entire market value.
This marks the third occasion where the PIF’s stake in Aramco has been bolstered. Since 2022, the fund has maintained a 4% stake. Additionally, the Sanabil investment firm, owned by PIF, possesses an analogous 4% stake.
Together, stakes by the PIF and its affiliated bodies in Saudi Aramco now stand at 16% – a worth of $327 billion, roughly equivalent to the total market value of giants such as Samsung Electronics or Home Depot.
The move is a testament to Saudi Arabia’s long-term efforts to fuel and diversify the national economy in accordance with the Vision 2030 strategy, as stated by state-controlled news agency.
Aramco had reported a robust full-year profit of $161.1 billion in 2022, helped by surging energy prices. The figures represent the most significant annual profit recorded by an oil and gas enterprise. Aramco is due to disclose full-year earnings for 2023 on March 11.
What is Vision 2030?
Since its inception in 1971, the Public Investment Fund has played a growing role in Vision 2030 – Crown Prince Mohammed bin Salman’s and Saudi Arabia’s collective blueprint to diversify the country’s economic dependency away from oil. The Fund lords over more than $700 billion, with noteworthy investments in the tech sector, contributing to SoftBank’s Vision Fund and Uber.
Simultaneously, the PIF’s investments in aviation, sports, and video games have grabbed attention.
In aviation, the PIF supports Riyadh Air, Saudi Arabia’s emergent flag carrier, charged with expanding the nation’s aviation presence and establishing it as a regional transport nexus.
In gaming, nearly $40 billion has funnelled into its subsidiary, Savvy Games Group, with the intent to secure a position in the colossal $180 billion gaming industry. Scopely, the mastermind behind Monopoly Go! and Marvel Strike Force, was bought over last year for $4.9 billion. The PIF also retains investment placements in renowned game publishers, and boasts the honor of being Nintendo’s major external investor.
The most noteworthy and contentious of the PIF’s investments lie in the sports sphere.
The PIF is now the holder of the four major clubs in the Saudi League, the biggest of which includes Al-Nassr FC, where Cristiano Ronaldo currently holds fort. They also retain ownership of Newcastle United Football Club, UK, and are stakeholders in LIV Golf, currently engaged in merger talks with the PGA Tour.
