Public Investment Fund Strategy

The Public Investment Fund Strategy is a long-term plan and framework designed to enhance the Public Investment Fund (PIF)’s role in bolstering the gross domestic product (GDP) and developing the national economy of the Kingdom of Saudi Arabia.

The PIF has developed its strategy to provide a clear foundation for implementation and achievement in support of Saudi Vision 2030. The strategy focuses on thirteen strategic sectors at the local level, which are priorities for the fund, including aerospace and defense, automotive, transportation and logistics, food and agriculture, among others.

Since the PIF began operating, it has worked to ensure it partners with innovative and advanced companies worldwide, as well as with investors. This vision was solidified in 2021 with the approval of the fund's five-year strategy by its Board of Directors, chaired by the Crown Prince, Chairman of the Council of Ministers, and Chairman of the Council of Economic and Development Affairs, His Royal Highness Prince Mohammed Bin Salman Bin Abdulaziz.

The strategy contributes to economic growth through various local and international investments and partnerships targeting comprehensive and sustainable development across traditional and modern sectors. As part of this strategy, the fund will work towards several key targets, most notably injecting at least SAR150 billion annually into the local economy, with increasing amounts each year until 2025.

Over the five-year period, the fund’s strategy, through its subsidiaries, is designed to significantly contribute to the non-oil GDP, with a cumulative target of SAR1.2 trillion. By the end of 2025, the fund aims to grow its assets to over SAR4 trillion and create 1.8 million jobs both directly and indirectly.

The PIF worked to serve all Saudi Vision 2030 programs and achieve its diverse goals. Therefore, the fund’s Board of Directors moved to reformulate its entire strategy, enabling the achievement of strategic goals with high efficiency, positively impacting the local economy, and maximizing sustainable returns. The fund doubled its assets to approximately SAR1.5 trillion by the end of 2020, contributing to the activation of new sectors and the creation of 331,000 direct and indirect jobs by the end of the third quarter of 2020.

The fund's 2021-2025 strategy achieves several important gains during this period, including stimulating the growth and diversification of the Saudi economy through various targets. These targets include empowering the private sector in the Kingdom and supporting the development process in a manner that enhances the Saudi economy and ensures a thriving future for the Kingdom. Additionally, the fund is committed to investing in new local projects.

Through this strategy, which represents a comprehensive action plan, the fund serves as a primary driver in enhancing the growth of the Saudi economy. It focuses on diversifying income sources, launching new sectors, localizing advanced technologies and knowledge, building strategic economic partnerships, and increasing the Kingdom's influence and role on the regional and global stage. The fund also aims to become one of the largest sovereign funds in the world, with a target of exceeding SAR7.5 trillion in assets by 2030.

The fund operates according to a precise system based on the articles and rules of the PIF Law, issued by Royal Decree and a decision of the Council of Ministers in 2019. The council granted the fund flexibility in developing its work plan according to Article Six, which provides it with broad powers and authorities. The fund is responsible for approving and issuing internal rules and policies, including the development of investment strategies, policies, and procedures. This includes determining targeted returns, establishing the mechanism for making investment decisions, and monitoring performance and divestment from investments.

The PIF is advancing its strategy and targets to support the overall economy of the Kingdom and enhance its growth rates. By 2025, these targets include increasing the value of assets under management to SAR4 trillion, investing a cumulative total of SAR1 trillion in new local projects, and raising the percentage of investments in new sectors from 15 percent in 2020 to 21 percent in 2025.

The fund works on developing strategic investments over the next five years in thirteen vital and strategic sectors, including food and agriculture; aerospace and defense; entertainment, tourism, and sports; metals and mining; transport and logistics; financial services; automotive; construction and building components and services; real estate; utilities and renewables; healthcare; consumer goods and retail; and telecom, media, and technology.

These sectors are approached through a strategic framework centered on three main pillars. The first is the investment pillar, aiming to launch and develop local sectors, advance local real estate projects, initiate mega projects, and diversify the PIF's assets. The second is the value creation pillar, supporting national development, empowering Saudi Vision 2030, fostering cooperation between investment portfolios, diversifying funding sources, and strengthening the fund’s financial position. The third is the institutional pillar, reinforcing the institutional system of the PIF.

The global expansion supports the PIF Strategy's efforts to establish a more diversified and flexible investment system capable of growing capital and diversifying assets. To this end, the PIF has invested in emerging international companies and future industries that facilitate the transfer of global expertise to the Kingdom. A number of Saudi professionals have benefited from these efforts, exemplified by the PIF's partnership with Lucid, which enabled Saudi graduates to gain knowledge in the field of electric vehicle manufacturing.

The fund's strategy and plans incorporate advanced tools and methods to achieve its goals, following best international practices, as demonstrated by its divestment from the Saudi Basic Industries Corporation (SABIC). This was mutually beneficial for all parties involved and marked a significant milestone for the third most important economic institution in the Kingdom. It also provided capital that enhances the PIF's long-term investment strategy, while simultaneously advancing the Kingdom's economic and developmental transformation.

The fund continues to play a role in development, diversification, and stimulating investments by supporting the creation of opportunities for the private sector and fostering partnerships that contribute to economic growth in the Kingdom. The fund has developed strategic partnerships with this sector through mega projects, including infrastructure initiatives, aimed at activating key industries such as housing, hospitality, tourism, and entertainment.

Moreover, the fund has established significant partnerships with the private sector across various sectors, leading to successful investment outcomes that have enhanced local content. For example, 'Roshn Real Estate' awarded contracts worth SAR1.6 billion to several Saudi companies, and 'Qiddiya' awarded contracts worth SAR700 million to local firms for the construction of the project's main roads. The Red Sea Project has also signed contracts worth SAR7.5 billion, with 70 percent of these contracts awarded to local companies.

Since the approval of its strategy, the PIF has achieved numerous milestones in both its local and global investments. Its efforts are not limited to enhancing the Kingdom's wealth by investing in financially viable projects but also extend to new sectors where the fund aims to stimulate the growth of promising industries and achieve sustainable economic and developmental impacts.

In alignment with its strategy, the PIF has reached several targets. In 2022, Ceer Company was launched as the first Saudi brand dedicated to manufacturing electric vehicles. Additionally, the Saudi Egyptian Investment Company was established, aiming to invest in several promising sectors in the Arab Republic of Egypt, and focusing on investing in key sectors.

The strategy's accomplishments also include the launch of the Halal Products Development Company, which seeks to invest in the growth and localization of the halal products manufacturing sector within the Kingdom. Subsequently, the fund announced the establishment of five regional companies aimed at investment in the Hashemite Kingdom of Jordan, the Kingdom of Bahrain, the Republic of Sudan, the Republic of Iraq, and the Sultanate of Oman, with targeted investments expected to reach up to SAR90 billion (USD24 billion) across various sectors.

In 2023, the Diriyah project was announced as the fifth mega project owned by the PIF. These mega projects are integral to PIF Strategy in terms of scope and ambition, with the portfolio of mega projects affiliated with the fund including NEOM, the Red Sea, Qiddiya, Roshn, and Diriyah.

That same year, the New Murabba Development Company was launched, with plans to develop the largest modern downtown in the world in Riyadh City, covering an area exceeding nineteen km² and a floor area of more than twenty-five million m².

Additionally, the establishment of Riyadh Air, the new national air carrier, was announced to boost the development of the air transport sector, enhance the Kingdom's strategic position, and increase the competitiveness of national companies. Badael Company was also established to develop, manufacture, and distribute innovative products to reduce smoking rates and improve the quality of life in line with Saudi Vision 2030.

In 2023, the launch of Kayanee was announced, an integrated company aimed at promoting and inspiring healthy living for women in the Kingdom. Additionally, the establishment of the Saudi Facilities Management Company "FMTECH," specializing in providing integrated services in facilities management, energy management, waste management, maintenance, cleaning, security, and landscaping services, was also announced.

The achievements of the PIF Strategy continued, and by 2023, the fund had invested about SAR5 billion in four leading national companies in the contracting sector (Nesma and Partners Contracting Company, al-Saif Company, Albawani Holding Company, and Mabanee Company).

The fund also holds several strategic investments in the consumer goods and retail sector, such as Tamimi Markets Company, Noon Company (a leading e-commerce platform in the Middle East), Halal Products Development Company, and Americana Restaurants International Company. Since 2017, the fund has established seventy-seven companies and contributed to the creation of more than five hundred thousand direct and indirect jobs.