Public Investment Fund Partnerships

The Public Investment Fund Partnerships are the investment partnerships undertaken by the Public Investment Fund (PIF), the sovereign wealth fund of the Kingdom of Saudi Arabia, as part of its efforts to seize investment opportunities both locally and internationally.

PIF continues to play a significant role in supporting the Kingdom's economy by building an investment portfolio that began with its establishment in 1971 by Royal Decree. The fund has worked on establishing several major companies in the Kingdom, funding and participating in vital projects and companies, and providing financial support to projects of strategic importance to the national economy.

PIF's expansion into investment partnerships gained further flexibility and vitality with a significant shift in 2015 when the Council of Ministers' decision linked PIF to the Council of Economic and Development Affairs (CEDA). Subsequently, the board was restructured to be chaired by His Royal Highness Prince Mohammed Bin Salman Bin Abdulaziz Al Saud, the crown prince, prime minister, and chairman of CEDA.

PIF plays a crucial role in implementing the Saudi Vision 2030 programs and projects. It is a central factor in achieving the vision and a leading economic catalyst for the Kingdom. In 2014, a key expansion took place when a Royal Decree was issued to grant PIF the authority to scale up activities by establishing new companies inside and outside the Kingdom, either independently or in cooperation with the public and private sectors, without the council's prior approval.

PIF has extended its investment activities through several operations that support global investments, as it launched two global investment portfolios: Strategic Global Investments and Diversified Global Investments. PIF has successfully created extensive relationships with various top-tier international investors, asset managers, investment banks, and international brokerage firms to become a worldwide large investment entity.

The fund's international investments have diversified, leading to an increase in its global investments to 30 percent of total assets under management, compared to around 5 percent in 2017. It has successfully diversified its investments geographically and across various asset classes and sectors by expanding its investments in North America, Europe, Asia, Latin America, and Africa.

PIF operates according to a specific strategy that enables it to build an investment portfolio that provides a sustainable and strong financial position. This enables PIF to have an impact felt beyond Saudi borders to drive the Kingdom's economic transformation through active, long-term investments and high standards of governance and transparency.

Since the launch of Saudi Vision 2030, the PIF has successfully built partnerships that ensure the Kingdom remains at the forefront of emerging global economic trends, supporting its development efforts. Its investment portfolios include investments in Saudi companies, investments aimed at developing and growing promising sectors, major Saudi projects, investments in real estate projects and infrastructure development in the Kingdom, strategic global investments, and diverse global investments.

PIF operates according to a law that promotes transparency and governance in business. This is in line with the PIF Law issued by the Royal Decree and the Council of Ministers resolution in 2019. According to this law, PIF reports to CEDA and has a public legal personality and financial and administrative independence. It is based in ‏Riyadh City and has branches inside and outside the Kingdom as needed.

According to Article Three of the Law, PIF aims to generate returns by investing its funds, whether in cash or in-kind, according to high standards. This is to serve the public interest, support economic development in the Kingdom, diversify its sources of income, and maintain future generations' interests.

According to Article Four of the Law, PIF shall have the powers to achieve its objectives and conduct its functions and duties, including investing inside and outside the Kingdom, acquiring and disposing of assets, including properties, in-kind rights, stakes, securities, foreign currencies, commodities, and financial derivatives of all kinds, in addition to incorporating companies and other special purpose vehicles (SPVs) inside and outside the Kingdom and entering therein as a sole partner or with a third party.

PIF can also extend loans and other forms of financing, take out loans and other forms of debt, including the issuance of warrants and bonds, issue securities for companies and other SPVs that PIF owns or holds shares therein, finalize agreements and Memorandum of Understanding (MoUs) relating to its activities with relevant entities in other states and international organizations.

As part of the Saudi Vision 2030 programs that collectively aim to achieve the desired growth and development for the Kingdom, the PIF program was launched. This program aims to enhance the PIF's role as a key driver of economic diversification in the Kingdom and to develop specific strategic sectors by growing and maximizing the impact of the fund's investments. It seeks to make the Fund one of the largest sovereign wealth funds in the world, as well as to establish strong economic partnerships that deepen the Kingdom's influence and role in the regional and global landscape.

The program, launched in 2017, achieves many goals aligned with the objectives of the PIF in diversifying and capitalizing on investments both locally and internationally. It enhances the Fund's position, making it a key driver in achieving Saudi Vision 2030. The program positions the fund as a leading economic catalyst for the Kingdom and an essential component of a thriving economy.

The partnership between PIF and the SoftBank Group in establishing the SoftBank Vision Fund represents a successful model of the partnerships PIF has formed. Both funds are engaged in implementing several high-value local and international projects. In 2017, a memorandum of understanding was signed to create the "Solar Energy Plan 2030," which became a new framework for developing the solar energy sector in the Kingdom. This resulted in the establishment of the first-of-its-kind power plant in the Kingdom, generating three GWs of electricity in 2018.

The partnership of the two parties proceeds to implement several investments and explore opportunities to establish industries in power generation systems and batteries across the Kingdom. Given the success of the SoftBank Vision Fund, PIF and SoftBank Group launched a world-class research joint venture to identify opportunities for robotic systems integration and utilize them in daily activities and tasks in the public sector, business institutions, and society.

To enhance the efforts and roles of the PIF in developing its portfolio activities, the PIF Strategy for the following five years was approved in 2021. This strategy serves as a cornerstone in realizing the Kingdom's ambitions for economic growth, improving quality of life, and achieving the concept of comprehensive and sustainable development across various traditional and modern sectors.

This strategy facilitates PIF's work to accomplish some of its objectives, including the annual injection of no less than SAR150 billion into the local economy until 2025. In addition, it contributes, through its subsidiaries, SAR1.2 trillion to non-oil GDP cumulatively. PIF also aims to create 1.8 million direct and indirect jobs.

PIF strategy represents an investment driving force that helps in building strategic economic partnerships. This effort aims to achieve the targets of Saudi Vision 2030 by diversifying the national economy and deepening the Kingdom's impact and role on the regional and global stages

Following the same approach, PIF continues its performance to become one of the largest sovereign wealth funds in the world, aiming for its assets to exceed SAR7.5 trillion by the year 2030.

PIF aims to build a number of partnerships that enable it to continue its growth and develop its investments across various fields. It focuses on investing in international startups or future industries that can facilitate the transfer of international expertise to the Kingdom, benefiting many Saudi talents. For example, PIF's partnership with "Lucid" Company has allowed several Saudi graduates to gain knowledge in the electric vehicle industry.

PIF continues to expand its partnerships with top-tier and effective partners at the local and international levels, including supporting the creation of investment opportunities for the private sector and creating opportunities and partnerships to participate in economic development across the Kingdom, as PIF has developed significant strategic partnerships with the private sector through major and infrastructure projects to revitalize important sectors, e.g., housing, hospitality, tourism, and entertainment.

PIF efforts in its national partnerships include involving the private sector as both an investor and a supplier to help increase the percentage of local content. Examples include awarding contracts worth SAR1.6 billion to several Saudi companies through Roshn Real Estate, awarding contracts worth SAR700 million to local companies for the Qiddiya project's main roads, and signing contracts worth SAR7.5 billion for the Red Sea Project, with 70 percent of these contracts awarded to local companies. PIF also focuses on entering sectors that require massive capital, such as refinancing, recycling, and military manufacturing, among others.

In 2022, the PIF announced the establishment of the Regional Voluntary Carbon Market Company, with the Fund owning 80 percent and the Saudi Tadawul Group Holding owning 20 percent. The company aims to support businesses and sectors in the region to enable them to achieve net-zero emissions. Additionally, it ensures the purchase of carbon credits to reduce carbon emissions in value chains.

Continuing its efforts to establish partnerships that support local supply chains and facilitate access to pharmaceutical products, the PIF announced the creation of the pharmaceutical investment company "Lifera" in 2023. Lifera specializes in large-scale pharmaceutical industries to enable the sector's growth and enhance its resilience by producing biopharmaceuticals on a commercial scale within the Kingdom.

PIF continues to form more international partnerships to transfer and localize its technologies. In 2021, it signed an agreement with E1 Series Ltd. to establish the world's first electric powerboat racing championship. This partnership is a foundational step in the establishment of the championship and accelerates the preparations for the inaugural season scheduled to be held in early 2024.

This partnership diversifies the Fund's investments and makes it more dynamic in seizing lucrative investment opportunities across various fields. It aligns with the PIF's strategy to enable global innovation, open new horizons for future industries, and build strategic economic partnerships.

PIF's sports partnerships continued to expand. In 2023, as part of the project to invest in and privatize sports clubs, four Saudi sports clubs—al-Ittihad, al-Ahli, al-Nassr, and al-Hilal—were transformed into companies. Each of these companies is owned by the fund and non-profit sports institutions for each club. PIF holds a 75 percent ownership stake in each club, while each non-profit sports institution associated with the four clubs owns the remaining 25 percent.

PIF continued to build its economic and strategic partnerships. On February 13, 2022, the Crown Prince, Prime Minister, Chairman of CEDA, and Chairman of the Board of Directors of PIF, Prince Mohammed Bin Salman Bin Abdulaziz, announced the transfer of 4 percent of Saudi Arabian Oil Company (Saudi Aramco) shares to the PIF.
Prince Mohammed Bin Salman stated that the transfer of these shares is part of the Kingdom's long-term strategy aimed at supporting the restructuring of the national economy in line with Saudi Vision 2030. This transfer also contributes to PIF's plans to increase its assets under management to approximately SAR4 trillion by the end of 2025.
The transferred shares of Saudi Arabian Oil Company (Saudi Aramco) will enhance the PIF's strong financial position and its high credit rating in the medium term. The fund's financing plan relies on the value of its assets and the investment returns from the assets under management.
PIF continues to achieve its strategy by maximizing its assets, launching new sectors, building strategic economic partnerships, and localizing technologies and knowledge. By the end of 2025, the fund aims to inject up to SAR1 trillion into new local projects and increase its and its subsidiaries' contribution to local content to 60 percent. Additionally, it seeks to create more direct and indirect jobs in the local labor market.