Page 207 - SALIK PR REPORT JANUARY 2024

1/3/24, 11:08 AM How world sees GCC: Region's sovereign wealth funds on the rise
PIF was actually born in 1971 and is the Gulf’s oldest SWF in its present form and name. However, it was
conceived as a development fund that would only support Saudi companies, while the central bank SAMA ran the
country’s de-facto SWF with its portfolio of foreign holdings. That all changed in 2015, when PIF was transferred
under the Council of Economic and Development Affairs (CEDA), chaired by Crown Prince Mohammed bin Salman
Al Saud.

In the past eight years, PIF has become one of the world’s most active (the most active in 2023!) SWFs both at
home and overseas, and is a key enabler of the country’s Vision 2030 and transformation. Further, its leaders have
no problems in announcing grand plans for the SWF, in 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.

In 2017, Riyadh set up a second fund, NDF, that would support PIF’s push for Vision 2030, but with a much more

domestic and low profile, so many analysts still consider PIF the only “pure SWF” in the Kingdom. Elsewhere in the
Gulf, the Saudi approach is followed by Qatar, which consolidates all its efforts under QIA; Kuwait, which does the
same with KIA and its entities; and Oman, which merged its two funds into OIA in 2020.

National Champions

Saudi Arabia is developing a range of national champions to advance Vision 2030. PIF has established subsidiaries

ranging from agriculture to finance, from industry to infrastructure. Central to the PIF-led development programme is
its multi-billion giga-projects, which all have an element of tourism: NEOM, including the Line, Oxagon, Sindalah
and Trojena; Red Sea Global; Qiddiya; Roshn; and Diriyah. At present, their value is not capitalised, but when they
are completed by 2030, they should boost the fund’s assets under management by tens of billions. The fund also
operates several subsidiaries including Sanabil, TAQNIA, Jada Fund of Funds, and STC Ventures that are building
their own impressive portfolios, and a 17 per cent stake in Prince Alwaleed’s Kingdom Holding.

An array of in-house businesses have been established across the entire economy as part of an overall strategy to
“crowd in” private sector investment, increase local content spend by portfolio companies, increase skills and
capacities of local suppliers, and bolster local supply chains. In transportation, PIF launched a $30bn airline Riyadh
Air and is building up its own electric vehicle brand Ceer. In industries, it acquired the Saudi Iron and Steel
Company (Hadeed) for $3.3bn. And in sports and entertainment, it continues to pursue global portfolios of gaming,
golf and football, which it seeks to use as a base for domestic initiatives.

Other Gulf states have looked to consolidating state-owned assets ahead of public listing to drive private
investment. Abu Dhabi has mandated Mubadala and ADQ to manage a portfolio of national champions, mostly in
infrastructure and energy. The listing of the utilities and energy champion TAQA boosted ADQ’s value, but the
fund’s non-TAQA portfolio has also increased from an estimated $36bn at inception to $115bn in 2023. Among

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