Saudi wealth fund PIF tells FII gathering it will cut overseas investments

Saudi Arabia’s sovereign wealth fund plans to cut its overseas investments by about a third, its governor told a conference in Riyadh on Tuesday, as the kingdom taps into its resources to fund plans to wean the economy off oil.

Speaking on a panel of business, technology and finance leaders, Public Investment Fund (PIF) governor Yasir Al-Rumayyan said the sovereign wealth fund was more focused on the domestic economy and aiming to bring the fund’s international investments down to between 18 per cent and 20 per cent of the total from 30 per cent.

Global business, technology and financial leaders have converged on the Saudi capital for the annual Future Investment Initiative (FII) summit, an opportunity for attendees to forge relations with some of Saudi Arabia’s biggest companies and its $925bn sovereign wealth fund.

This year, the event may also test investor appetite for Saudi Arabia’s economic transformation at a time when there are fears of widening conflict in the Middle East.

The sovereign wealth fund is the primary vehicle for Prime Minister and Crown Prince Mohammed bin Salman’s plans to steer the Saudi economy away from oil, with investments of hundreds of billions of dollars to develop new sectors and create more sustainable revenue streams.

However, the fund has been scaling back some of its flagship “giga-projects” due to rising costs.

Al-Rumayyan said there had been a shift in the way the fund deploys its investments towards establishing joint ventures with both international and local companies.

“Now we see a shift from people who want us to invest or take our money to invest from there to co-investments,” he told the conference.

Other high-profile speakers on the Tuesday morning panel included Stephane Bancel, CEO of Moderna, BlackRock CEO Laurence Fink, Blackstone CEO Stephen Schwarzman and Alphabet’s President and CIO Ruth Porat.

Most executives on the morning panel spoke about the potential life-changing impact of artificial intelligence. At the same time, Citadel CEO Ken Griffin said that markets expected Donald Trump to win the US election on November 5 but that the outcome remained “almost a coin toss”.

Blackstone Group CEO Steve Schwarzman, who has endorsed Trump, initially said he would not comment on the election before saying that Trump had a better understanding today of how the presidency works than in 2016.

While the first panel made no mention of wars in the region, it was followed by a speech by economist Jeffrey Sachs of Columbia University that was critical of the US and Israel.

“We don’t need artificial intelligence in war; we need human intelligence to stop the wars,” he said to applause. “We don’t need more smart weapons; we need negotiations.”

Sachs said Israel and the US were blocking the establishment of an independent Palestinian state.

“Until there is (a Palestinian state), there is going to be no peace in the region,” he said, speaking of wars in Gaza and Lebanon and concerns there may be a wider regional conflict.

Read: Saudi Arabia’s wealth fund PIF swings to $36.8bn profit in 2023