PIF distributes its investments into 11 sectors with energy and real estate in the lead

By Ahmed Falah Al-Jahni

The annual report of the Public Investment Fund (PIF) for the year 2023, which was issued yesterday, revealed the distribution of the fund’s investments across a wide range of industries in accordance with global standards for sectors. The data indicated that the fund distributes its investments among 11 sectors, led by energy, accounting for 23.1%, followed by the real estate sector, with a share of 17%.

The Saudi sovereign fund invests in several energy companies, and the Crown Prince announced in April 2023 the transfer of 4% of the state’s shares in Saudi Aramco to the ownership of Sanabil Investments Company, a fully owned PIF company. In March of this year, the Crown Prince also announced “the completion of the transfer of 8% of the total issued shares of the Saudi Arabian Oil Company (Saudi Aramco) from state ownership to portfolios of companies wholly owned by the Public Investment Fund.” The Fund also owns the Renewable Energy Localization Company (RELC), which aims to strengthen the partnership between leading international companies and the private sector in the Kingdom with the aim of meeting the increasing local and international demand for renewable energy generation, securing and strengthening supply chains in the Kingdom and contributing to reaching the optimal energy mix for producing electricity and displacing liquid fuels used in the electricity production sector and other sectors in the Kingdom, within the framework of efforts to achieve the goals of the “Saudi Arabia 2030” vision, in addition to many of the Fund’s investments in this sector, including Share in “ACWA Power”.

As for the distribution of the fund’s investments, as appeared in the report, the information technology sector ranked third with a rate of 9.4%, while finance came in fourth place with a rate of 7.3%, and the communications sector came in fifth place with a rate of 6.9%. The public utilities sector came in sixth place with a share of 5.5%, while basic materials came in seventh place with a share of 4.6%, and the industries sector came in eighth place with a share of 3.1%, while luxury consumer goods ranked ninth with a share of 2.5%. Basic consumer goods ranked tenth with a rate of 1.2%, while health ranked eleventh with a rate of 0.4%, and unclassified investments with a rate of 18.9%.

The fund distributes its international investments by about 20%, and local investments 79%, including the treasury of the total, while the remaining 1% goes to amounts recovered from other parties.

The Public Investment Fund revealed in its annual report that the total net cash return for both the investment portfolio aimed at developing and developing promising sectors, and the investment portfolio in Saudi companies, has reached 42 billion riyals for the year 2023 (about $11.2 billion), which is nearly double the target by 20 billion Riyals (approximately $5.3 billion), according to the global investment performance standards issued by the CFA Institute.

The Public Investment Fund contributed to the creation of 730,000 direct and indirect jobs until the end of 2023, noting that the total number of jobs created by the first quarter of 2024 reached 763,000 jobs.

At the same time, the fund explained that the size of the assets of the investment portfolio in real estate projects and Saudi infrastructure development projects witnessed a growth of 15% compared to the end of 2022 to reach 233 billion riyals. The total volume of assets in the international investment portfolio reached 586 billion Saudi riyals by the end of 2023, a growth of more than 14% compared to the previous year. The strategic global investment portfolio plays a fundamental role in enhancing the Fund’s broad international portfolio and developing capital over the long term, with a focus on impact investments that generate significant returns over time.

Yasir Al-Rumayyan, Governor of the Public Investment Fund, said, “The Fund’s approach to achieving economic development depends on 8 strategic pillars within the Vision Realization Program, which collectively work to enhance the Fund’s impact and contribute to achieving the second pillar of the Saudi Vision 2030.” The Public Investment Fund Vision Achievement Program works to advance local sectors by identifying and developing 13 strategic sectors that are extremely important to the local market.

The program also focuses on developing the five major projects while taking advantage of technology and knowledge to stimulate the economy and achieve diversification away from dependence on oil.”