Saudi’s PIF records $11bn in losses

Saudi Arabia’s Public Investment Fund (PIF) experienced substantial losses of $11 billion in its investments in 2022, following a successful year in which it recorded profits of $19 billion. The decline in bond and stock prices globally, with the S&P 500 dropping by nearly 20% in 2022, has been attributed to the losses by analysts.

Despite the setback, the PIF has witnessed significant growth, with its assets expanding from $676 billion to $778 billion in 2022, in line with Saudi Arabia’s goal of reaching $2 trillion in assets by 2030 as part of its Vision 2030 diversification plan. The fund’s expansion has notably been seen in the sports sector, leading to the recent establishment of a Sports Investment Company in 2023 that will focus on acquiring new sports assets.

The fund recently finalized a merger between its LIV golf tournament and the PGA, after attracting major golfers Tiger Woods and Rory McIlroy to become stakeholders. During a US Senate hearing on the deal, PGA board member Jimmy Dunne expressed that the merger and subsequent negotiations were the best way to preserve the independence of the sport, as there were concerns about a potential takeover by the fund.

These developments in golf align with the PIF’s broader strategy of diversifying its sports investments. For instance, negotiations have taken place with the ATP Tour regarding possible investments in new projects and ventures within tennis.

The PIF has also established the Savvy Games Group to lead its entry into the gaming industry, having previously made significant investments in gaming giants such as Nintendo, Activision Blizzard, and Ubisoft.

Football has garnered substantial attention as well, particularly after the fund’s acquisition of English Premier League club Newcastle United in 2021. Furthermore, the PIF has attracted world-class football players like Cristiano Ronaldo and Karim Benzema to the kingdom’s domestic league this year. Investments in football are expected to continue, with Bloomberg reporting that the fund is considering the purchase of another club from a top-flight European league. This consideration follows a change in UEFA rules that previously prevented clubs with the same owners from competing in its competitions.

Led by Crown Prince Mohammed bin Salman, the Public Investment Fund plays a central role in Saudi Arabia’s Vision 2030 initiative, aiming to diversify the country’s economy away from its heavy reliance on the energy sector.