The annual returns of the Public Investment Fund (PIF) surged 8.7% YoY since 2017.
This is thanks to the global market rally last year, where the S&P 500 index delivered a return of 24%.
Details
An annual report published on Monday revealed that the assets under management in the fund grew to USD 760 billion by the end of 2023.
This was supported by the transfer of a 4% stake, valued at more than USD 70 billion, in Saudi Aramco to Sanabil Investments, a subsidiary of the Saudi sovereign wealth fund, last year.
The total value of the assets managed by the Public Investment Fund rose to USD 925 billion last July.
This represents an increase of about 21% compared to the end of 2023.
The fund’s revenues saw a “qualitative leap” last year, surpassing $88.3 billion, marking an increase of nearly 101% year-on-year.
So What
Saudi Arabia transferred another 8% stake in Aramco to the Public Investment Fund, bringing it closer to its goal of managing more than USD 1 trillion in assets by 2025.
On the other hand, according to accounts published in July, the fund earned USD 25 billion from investment activities last year.
This compares to a loss of USD 11 billion in 2022.
Some context
The fund recorded gains from both its local investments and international portfolio.
International assets accounted for one-fifth of total holdings or SAR 586 billion by the end of 2023, an increase of more than 14% from 2022.
Meanwhile, the share of PIF’s externally managed assets fell to 15% from 17%.
It’s noteworthy that the fund, chaired by Saudi Crown Prince Mohammed bin Salman, is leading efforts to diversify the national economy away from oil.
Now what
Bloomberg reported that the Public Investment Fund is seeking to purchase cargo planes from the giants Boeing and Airbus.
This is to establish a new air cargo company, as it aims to transform Saudi Arabia into a “logistics hub” to compete with Emirates and Qatar Airways.
The potential cargo company is expected to serve Saudi Arabian Airlines and the newly established Riyadh Air.
Notably, Saudi Arabia is looking to capitalize on its location at the “global crossroads” connecting Europe, Asia, and Africa amid increasing demand for air cargo by focusing on tourism, aviation, and logistics.
Air cargo shipments rose 14% in June compared to the previous year, marking the seventh consecutive month of 10% or more growth, according to data from the International Air Transport Association (IATA).
Air cargo is on track to surpass the “record levels” recorded in 2021.
