Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has announced plans to reduce its international investments by nearly a third, signalling a strategic pivot that draws a close to a decade of ambitious global spending. With an asset base of approximately $930 billion, PIF’s decision marks a significant adjustment in its investment portfolio, refocusing on the Kingdom’s domestic economy and reflecting a broader economic recalibration under Saudi Vision 2030.
The decision, reported by the Financial Times, stems from the directives of Crown Prince Mohammed bin Salman, who has led efforts to diversify the country’s economy and reduce Saudi Arabia’s longstanding dependency on oil. This is part of a wider national initiative to channel resources into sectors such as tourism, entertainment, infrastructure, and technology—areas expected to drive future economic growth and provide sustainable employment.
PIF Governor Yasir al-Rumayyan confirmed that the fund plans to lower the share of its foreign investments from 30% to a targeted range between 18-20%. “We will now focus more on our domestic economy, having achieved and accomplished many significant things,” said Al-Rumayyan. He noted that the international investment landscape is also evolving, with global partners increasingly shifting their approach from seeking direct funding from PIF to co-investment models that position the fund as a collaborative partner rather than a mere capital source.
This change in direction contrasts with PIF’s previous decade of aggressive international expansion, which saw the fund invest heavily across key sectors worldwide. Among its most notable ventures, PIF made a $45 billion investment in the SoftBank Vision Fund in 2016, aimed at high-growth technology firms globally, and allocated $20 billion to Blackstone’s infrastructure fund, targeting infrastructure projects across the United States. Additionally, in 2021, PIF acquired an 80% stake in English Premier League football club Newcastle United, signalling its interest in the sports and entertainment industries and cementing Saudi Arabia’s growing presence on the global sports stage.
The PIF’s efforts to diversify its portfolio are part of a longer-term plan to secure the Kingdom’s financial future while responding to shifting economic trends. For decades, Saudi Arabia’s economy has relied heavily on oil exports, with oil revenue comprising around 50% of the Kingdom’s GDP and around 70% of government income. However, the oil market’s volatility, combined with global efforts to shift toward renewable energy, has prompted Saudi leadership to develop a broader, more resilient economic base. PIF has thus played a critical role in deploying sovereign wealth towards projects and investments that promote sustainability and economic stability.
Analysts suggest that the fund’s shift away from foreign investment may be due, in part, to changing perceptions of risk and a desire to concentrate on transformative projects within the Kingdom. Recent initiatives include the development of the futuristic city Neom on the Red Sea coast, the ambitious Qiddiya entertainment city, and a range of luxury tourism projects along the Kingdom’s western coast. These ventures are expected to generate jobs, stimulate private sector growth, and attract foreign investment to Saudi Arabia, thus reinforcing PIF’s impact on the domestic economy.
Internationally, the PIF’s decision aligns with a broader trend among sovereign wealth funds to adopt more targeted, collaborative investment models. By taking an approach that favours co-investment alongside other global funds, PIF is aligning itself with best practices in the sector, seeking not only financial returns but also knowledge-sharing opportunities that can benefit its own projects within Saudi Arabia. This trend has seen a shift towards strategic investments that prioritise long-term value and risk mitigation.
While PIF’s international investments may be scaled back, the fund’s impact on the global financial landscape remains significant. Its sizeable stakes in international companies and collaborations with multinational corporations have underscored Saudi Arabia’s role as a pivotal investor. The Crown Prince’s efforts have also made the Kingdom a critical player in emerging sectors such as artificial intelligence, biotechnology, and renewable energy.
In addition, PIF’s evolving strategy underscores the growing prominence of Saudi Arabia’s domestic economic ambitions under Vision 2030, which aims to double the private sector’s share of GDP, create six million new jobs, and position Saudi Arabia as a top-15 global economy by 2030. With the fund’s renewed focus on the home front, Saudi Arabia is signalling its intent to leverage its financial strength and regional advantages, catalysing growth from within and fostering an economy less vulnerable to external shocks.
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