Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has emerged as a significant player in both public and private markets in the United States. Unlike many U.S. funds, the PIF is not obligated to disclose its specific holdings in these markets.
However, new information recently came to light during the PGA-LIV merger hearings, revealing a previously undisclosed list of the fund’s top public equity holdings valued at approximately $35.5 billion. This list indicates that the PIF has made strategic investments in various experiential offerings, encompassing gaming and in-person entertainment.
As of March 31, the updated list reveals that the PIF holds an $8.9 billion stake in Lucid, an electric automaker. This stake represents 25.1% of the PIF’s equity holdings, with the fund controlling roughly 60% of Lucid’s outstanding shares. The PIF’s second-largest stake, valued at $3.3 billion, is in Activision Blizzard, accounting for 9.1% of the fund’s public equity holdings.
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Notably, shares of Activision Blizzard experienced a more than 10% surge in midday trading on Tuesday after a judge denied the Federal Trade Commission’s request to halt Microsoft’s acquisition of the company.
The PIF’s other significant corporate holdings, in descending order of size, include Electronic Arts ($2.98 billion, 8.4% of the portfolio), Uber ($2.3 billion, 6.5%), Take-Two Interactive Software ($1.36 billion, 3.8%), and Live Nation ($880 million, 2.5%).
While the PIF’s tech exposure fluctuates relative to the Nasdaq, its $691 million stake in Meta accounts for approximately 1.9% of the fund’s total public market allocation, compared to the stock’s 2.87% weighting in the S&P. Notably, Google constitutes 2.87% of the Nasdaq by weight but represents only 1.2% of the PIF’s $35.51 billion public portfolio. The PIF’s investments also reflect an overweight position in other tech names such as Booking Holdings, Take-Two, Uber, and Zoom.
Venture capital and private equity firms have shown great interest in Saudi Arabia, capitalizing on the country’s vast financial resources as it diversifies its investments away from oil and gas. Crown Prince Mohammed bin Salman is leading this diversification effort, and the sovereign wealth fund’s privileged access and international attention have grown as a result.
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$11-billion loss
Despite a worldwide spending spree, Saudi Arabia’s sovereign wealth fund suffered an $11 billion loss on its investments last year due to global stock and bond market downturns. In contrast, the fund enjoyed a $19 billion profit in 2021, taking advantage of the market rally following the COVID-19 pandemic.
While the PIF, which now manages approximately $778 billion in assets, did not disclose specific shareholder returns for 2022, it generated a 25% return in 2021, on par with S&P investors during the same period. These results translated into a net loss of 36.6 billion riyals ($9.8 billion) in 2022, compared to a profit of 81.8 billion riyals in the previous year.
These figures provide a rare glimpse into the financial operations of one of the world’s largest state investors. Since its transformation into a sovereign fund in 2016, the PIF has acquired stakes in video game makers, electric car manufacturers, and funded new cities in the desert. Its goal is to amass $2 trillion in assets by 2030.
The PIF has recently garnered global attention through its merger of the LIV golf tournament with the PGA, reflecting Saudi Arabia’s strategy to enhance its soft power and international image through investments in global sports.
Senator Richard Blumenthal, a prominent Democratic lawmaker, has launched a full-blown probe into the highly debated merger.
However, despite the PIF’s financial losses, the kingdom’s government achieved its first surplus in almost a decade due to surging oil prices and production volumes. This surplus has facilitated Saudi Arabia’s ongoing spending to diversify its economy away from oil.
Throughout 2022, the PIF established the Sports Investment Company as a wholly-owned subsidiary to engage in international and domestic sports investments. Additionally, the Saudi government transferred an additional 4% stake in energy giant Aramco, worth nearly $80 billion, to the PIF this year.
The fund’s borrowing reached $85 billion by the end of last year, and it raised an additional $5.5 billion through a three-part green bond sale earlier this year.
Information for this briefing was found via CNBC, Bloomberg, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
