Saudi Arabia’s Public Investment Fund (PIF) announced a program that aims to boost its assets under management (AUM) to SAR 1.5 trillion in 2020 from SAR 840 billion in 2017.
The sovereign fund is looking forward to raising total shareholder return (TSR) to 5% (the baseline stood at 3% from 2014 to 2016), and contribute 6.3%, or over SAR 170 billion, to the Kingdom’s gross domestic product (GDP).
PIF is the key driver of economic transformation in Saudi Arabia. It strives to enhance its position as an active investor and global partner in vital projects. It also offers finance to key projects of strategic importance to the national economy.
The fund’s strategy was developed to unlock new sectors, such as military industries, entertainment, and recycling through setting up new companies, development of infrastructure and giga projects.
PIF aims to support the Kingdom’s development efforts, diversify income sources, and localize cutting-edge technology and knowledge.
The sovereign wealth fund’s operations and investments are being built on a commercial basis that focuses on major principles that are in line with PIF’s vision, strategy and objectives. PIF has also developed an innovative institutional framework that helps the fund; as an active investor, to work and monitor the operation and activities of its portfolio companies, in accordance to the highest governance framework standards.
PIF has six investment pools, of which two target international investments. The first portfolio focuses on certain sectors that will reflect positively on the local economy, or that are linked to future industries.
The other one focuses on diversifying liquidity and income sources through fixed-income investments, listed and unlisted stocks, real estate, infrastructure and alternative investments, such as hedge funds.
On the other hand, the remaining portfolios focus on local investments. PIF’s investments in Saudi companies account for the majority of its pool, including listed and unlisted companies.
The fund relies on the “PIF Way”, the mechanism by which the fund aims to support and drive value creation alongside its portfolio companies building on PIF’s independent governance and operational framework.
The PIF Way aims helps businesses in supporting the development of an effective governance structure, identifying and supporting new sources of growth and profitability, leveraging PIF’s infrastructure and making the most of the advantages offered by PIF’s extensive local and global network of companies, thought leaders in various fields, such as institutional communication, finance, treasury, taxes, legal affairs, social responsibility and governance, development and training courses, etc.
The fourth portfolio aims to back investments in promising, emerging sectors such as entertainment, recycling, and military industries.
Accordingly, the PIF established Saudi Military Industries Company (SAMI) and Saudi Entertainment Ventures (SEVEN).
The last two portfolios focus on developing mega real estate projects and future cities, enhancing the quality of infrastructure, developing urban models in major cities, in addition to setting up housing and tourism projects.
|
PIF’s Local Direct Investments |
|
|
Sector |
% |
|
Industries, transport and logistics services |
41.8% |
|
Telecommunications and IT |
20.6% |
|
Financial institutions |
19.7% |
|
Energy |
9.5% |
|
Real estate and infrastructure |
5.4% |
|
Foodstuffs, consumer and agricultural products |
2.3% |
|
Retail and entertainment |
0.5% |
|
Education |
0.2% |
|
Healthcare |
0.2% |
|
Total |
100% |
Comments
{{DisplayName}}
{{ElapsedTime}}