Saudi Wealth Fund, Once Flush with Cash, Now Demands Reciprocal Investment
RIYADH, SAUDI ARABIA – The Saudi Public Investment Fund (PIF), the $100 billion+ sovereign wealth fund spearheaded by Crown Prince Mohammed bin Salman, is signaling a shift in strategy, now requiring international investors to reinvest heavily within Saudi Arabia as a condition for further funding, according to sources attending recent high-level meetings. This comes as the fund, once fueled by an estimated $500 million per day from oil sales and asset seizures, appears to be facing cash constraints despite promises of a $1 trillion investment portfolio.
Established in 1971 to bolster local Saudi companies like national banks and electric utilities, the PIF remained largely unknown until 2015, when control was transferred to the then-29-year-old Prince Mohammed. He subsequently transformed the fund,injecting government cash,securing loans,and diverting oil revenue to rapidly expand its holdings. By 2015, the fund held approximately $100 billion in assets with a staff of just 50.Today, it boasts over 3,000 employees and reported a 25% revenue increase in its most recent annual report (August).
Though, the era of readily available capital appears to be waning. At recent gatherings,including the “Davos in the Desert” Future Investment Initiative in Riyadh,PIF representatives indicated a change in investment terms. New investments will now be contingent on directing more than twice the invested amount back into private Saudi companies, effectively bolstering PIF-owned projects.
“Ther is no obligation. But there is definitely an incentive,” stated PIF spokesman Rupert Trefgarne.
The shift reflects a potential tightening of resources, a stark contrast to previous years when Western businesses reportedly left Riyadh “with bags full of funds.” The change in approach is being overseen by PIF Governor Yasir al-Rumeyan, a former regional banker who, according to his own account, was tasked by the Crown Prince to assemble a management team after initial recommendations were rejected. Al-Rumeyan has visibly embraced his role, demonstrating the fund’s influence and reportedly correcting those who mispronounce its name.
The fund’s growth has been linked to the creation of 1.1 million Saudi jobs, a claim that remains unverified. The PIF’s influence is also evident in events like lavish dinners hosted at a villa formerly owned by a businessman imprisoned during a 2017 crackdown on dissidents, highlighting the fund’s complex relationship with the Saudi government’s broader policies.
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