Saudi Public Investment Fund Sees $8 Billion Write-Down

Saudi Arabia’s sovereign wealth fund saw a major write-down as investments in gigaprojects in the kingdom plummeted.

The Saudi Public Investment Fund saw an $8 billion write-down at the end of last year, despite assets under management reaching nearly $1 trillion, CNBC reported.

The hit came as gigaproject investments declined by 12.4 percent to $56.2 billion. At the same time, assets overseen by the investment fund increased 19 percent from the end of 2023 to about $913 billion, making it one of the planet’s largest and fastest-growing sovereign wealth funds. Gigaprojects such as the $500 billion Neom development made up 6 percent of the investment fund’s assets, down 8 percent from the year before.

Annualized returns for the PIF since 2017 dropped from 8.7 percent to 7.2 percent. The fund also broadened its funding base as it raised nearly $10 billion in public debt and $7 billion privately.

International investments made up 17 percent of the portfolio, down from 20 percent the year prior. The fund has significant holdings in companies like Uber and Tesla, and owns major sports franchises like LIV Golf and British soccer club Newcastle United.

The Saudi kingdom is turning its focus to Vision 2030, its initiative to diversify the Saudi economy away from oil and create new jobs and industries for younger workers.

Neom, a new region in the western part of the country roughly the size of Massachusetts, is a big part of this plan.

Neom is expected to contain a number of futuristic cities and developments that the kingdom hopes will attract millions of new residents. But the development has been plagued by ballooning budgets and operational hangups that have led the kingdom to pare down or completely eliminate some of the projects involved, according to CNBC.

The cost of the entire Neom development is estimated to be between $500 billion and $1.5 trillion. Spending seemingly came to a half last year as the Saudi budget deficit grew while decreasing oil barrel prices made it harder to create a balanced budget.

— Chris Malone Méndez