Energy
Thursday, January 4th, 2024 4:46 pm EDT
Key Points
- PIF Dominance: Saudi Arabia’s Public Investment Fund (PIF) emerged as the leading spender among global sovereign wealth funds in 2023, accounting for a quarter of the total $124 billion spent by state-owned investors. PIF significantly increased its deal activities from $20.7 billion in 2022 to $31.6 billion in 2023, making it a heavy-hitter both domestically and overseas. Controlled by Saudi Crown Prince Mohammed bin Salman, PIF has total estimated assets of $776 billion and actively pursues deals and joint ventures in line with Vision 2030, Saudi Arabia’s economic diversification plan.
- Global Sovereign Wealth Fund Trends: Despite most major stock markets experiencing a rally in 2023, the overall deployment of funds by global sovereign wealth funds decreased by 20% compared to the previous year. This decline raises questions about an overly cautious approach among these institutions, considering the ample capital available. PIF’s remarkable spending contrasted with the trend of reduced spending by most other sovereign wealth funds. Four other funds from the Gulf Cooperation Council (GCC) – Mubadala, the Qatar Investment Authority, ADQ, and the Abu Dhabi Investment Authority – also made it into the top 10 spenders.
- Interest in Emerging Markets and Future Trends: The report highlighted a renewed interest in emerging markets among several sovereign investors, including Saudi Arabia, Türkiye, and the UAE, facilitated by domestic sovereign wealth funds. Additionally, emerging markets such as India, Brazil, China, and Indonesia attracted attention. Looking ahead to 2024, the report anticipates the emergence of more sovereign wealth funds globally, including Hong Kong’s HKIC, Philippines’ Maharlika, and Pakistan’s PSWF. The formation of Dubai’s new sovereign wealth fund, DIF, is expected to have a significant impact, potentially attracting personnel from other funds and causing notable changes in the landscape.
In 2023, Saudi Arabia’s Public Investment Fund (PIF) emerged as the leading spender among global sovereign wealth funds, accounting for a quarter of the $124 billion invested by state-owned investors, according to a preliminary report by research consultancy Global SWF. The Saudi fund significantly increased its deal activities from $20.7 billion in 2022 to $31.6 billion in 2023, contrasting with the trend of reduced spending by most other sovereign wealth funds. Despite global stock markets experiencing a rally, the report suggests that the overall 20% decrease in fund deployment signals an overly cautious approach by these institutions, considering the ample capital available. Controlled by Saudi Crown Prince Mohammed bin Salman, PIF has total estimated assets of $776 billion and has actively pursued deals and joint ventures in alignment with Vision 2030, a plan aimed at diversifying the Saudi economy away from oil. Notable overseas investments in 2023 included Nintendo in Japan and Vale Basic Materials in Brazil.
In addition to PIF, four other funds from the Gulf Cooperation Council (GCC) made it to the top 10 spenders – Mubadala, the Qatar Investment Authority, ADQ, and the Abu Dhabi Investment Authority. PIF surpassed Singapore’s GIC, which had led spending by wealth funds for the past six years. Despite receiving significant inflows from the central bank, GIC reduced its investment activity by 37% in terms of volume. The report highlighted the renewed interest in emerging markets among several sovereign investors, including Saudi Arabia, Türkiye, the UAE (with the help of domestic SWFs), and India, Brazil, China, and Indonesia.
Looking ahead, the report anticipates the emergence of more sovereign wealth funds in 2024, including Hong Kong’s HKIC, Philippines’ Maharlika, and Pakistan’s PSWF. The formation of Dubai’s new sovereign wealth fund, DIF, is expected to have a significant impact, potentially attracting personnel from other SWFs. Overall, the report underscores the dynamic landscape of sovereign wealth funds, with Saudi Arabia’s PIF taking a prominent position in global investment activities and a shift towards increased interest in emerging markets among sovereign investors.
For the full original article on CNBC, please click here: https://www.cnbc.com/2024/01/03/saudi-arabias-sovereign-wealth-fund-overtakes-singapores-gic.html
