According to a report published on January 1st, Saudi Arabia’s Public Investment Fund (PIF) played a significant role in global sovereign wealth fund spending in 2023, accounting for approximately 25% of the nearly $124 billion expended by such funds worldwide.
PIF’s remarkable spending totaled a staggering $31.5 billion in 2023, compared to the collective $123.8 billion spent by all sovereign wealth funds, as reported by industry specialist Global SWF, a tracker of sovereign investment funds.
The robust performance of global stock markets in the preceding year contributed to an all-time high in assets managed by sovereign wealth funds globally, reaching $11.2 trillion.
Additionally, the report noted that total spending by sovereign wealth funds on initiatives related to the energy transition, including investments in green hydrogen and lithium mining, reached a record high of $25.9 billion in 2023.
Despite these impressive figures, the total spending by sovereign wealth funds in 2023 was 21% lower than the previous year, prompting Global SWF’s managing director, Diego López, to suggest that this cautious approach might not be justified, considering the ample capital available to these institutions.
Singapore’s GIC, which had been the leading spender among wealth funds for the past six years, notably reduced its investments by 48% in 2023, even with a $144 billion inflow from the country’s central bank.
The Global SWF report revealed that Gulf funds, in particular, increased their dominance in dealmaking, largely at the expense of Canadian and Singaporean funds, accounting for almost 40% of the investment value deployed by sovereign wealth funds.
The data provided by organizations like Global SWF is vital since not all sovereign funds publish annual reports, and five of the top 10 funds do not disclose the exact total of their assets under management.
The report also highlighted Saudi Arabia’s PIF investments, including major expenditures in sports, such as taking control of the country’s top soccer clubs and participating in a merger agreement within the golf industry.
Additionally, PIF made substantial investments in various sectors, with 42% of its spending directed towards domestic projects, including acquisitions like the $4.9 billion purchase of U.S. gaming company Scopely, the $3.6 billion acquisition of Standard Chartered’s aircraft leasing division, and a $3.3 billion investment in steelmaker Hadeed.
Looking ahead to 2024, Global SWF anticipates that assets managed by all state-owned investors, including sovereign wealth funds, central banks, and pension funds, will surpass the previous peak of $50.8 trillion in assets under management recorded in 2021, taking into account the gains achieved in the past year.