Saudi wealth fund takes $15.6bn hit from SoftBank and tech

Saudi Arabia’s sovereign wealth fund reported a $15.6bn comprehensive loss for 2022 after the value of its investments in SoftBank Vision Fund plunged and other tech ventures were hit by a market downturn.

The Public Investment Fund, or PIF, made an income of $25.4bn the year before, according to an annual financial report published Sunday.

The PIF, which is chaired by Crown Prince Mohammed bin Salman, significantly increased the proportion of its assets dedicated to Saudi stocks last year, from 24 per cent to 32 per cent. It also reduced from 20 per cent to 10 per cent the portion put toward International Strategic Assets, a portfolio which includes English football club Newcastle United and a Blackstone Group fund investing in US infrastructure.

Driven by the #PIFstrategy, the Fund is diversifying Saudi Arabia’s economy and unlocking its potential.
In doing so, #PIF is creating a better future for Saudis and driving change worldwide.#ShapingTheFuture

Learn more: https://t.co/B7fLWeWpwc pic.twitter.com/PZm3dESxP4

— Public Investment Fund (@PIF_en) August 6, 2023

The PIF is a key part of the government’s push to diversify from oil. The crown prince is using it to invest tens of billions of dollars in everything from tourism to electric vehicle and sports projects in the kingdom.

Saudi wealth fund asset growth

The PIF didn’t disclose a figure for shareholder returns for 2022, when the S&P 500 Index dropped almost 20 per cent. In 2021, it made a 25 per cent return, roughly in line with that of investors in the S&P for the same period.

SoftBank Group’s first Vision Fund, backed by Saudi Arabia and Abu Dhabi, saw a record annual loss of $32 billion in 2022.

Even with the loss, the PIF’s assets under management grew to $595.5bn from $527.8bn in 2021.

The growth was largely propelled by a share transfer of 4 per cent of Saudi Aramco in February 2022, which contributed a stake with an estimated worth of $80bn.

The fund would have benefited from global equities, including those in the US and Saudi Arabia itself, rising significantly since the end of 2022. Current estimates place the PIF’s assets at about $777bn according to the Sovereign Wealth Fund Institute.

Read: Saudi Arabia’s sovereign wealth fund PIF reports $11bn loss for 2022