Saudi Arabia’s wealth fund to cut international investment target

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Saudi Arabia’s sovereign wealth fund plans to scale back the share of its international investments by about a third, drawing a line under the past decade’s multibillion-dollar global spending spree as it refocuses on efforts to boost the domestic economy.

The Public Investment Fund, which has about $930bn worth of assets, said it intended to cut the proportion of funds invested overseas to between 18 and 20 per cent, down from 30 per cent.

“So initially we had less than 2 per cent of international investments. Most of the investments were developmental projects within the Saudi economy,” PIF governor Yasir al-Rumayyan told the Future Investment Initiative conference on Tuesday in Riyadh.

“But then it increased from 2 per cent all the way up to 30 per cent. Now our target is to bring it down to a range between 18 to 20 per cent.”

As the PIF sought to rapidly build up its foreign exposure from virtually zero, it made waves with a string of high-profile deals, including pumping $45bn into SoftBank’s Vision Fund in 2016 and $20bn into a Blackstone infrastructure fund the following year.

The fund has also made splashy acquisitions including Newcastle United football club and bankrolled ventures such as the LIV Golf professional tour.

The PIF has been at the heart of a major plan launched by Crown Prince Mohammed bin Salman to diversify Saudi Arabia’s economy away from its dependence on oil revenues.

Rumayyan said international investors who had previously sought funding from the PIF were also shifting their approach.

“We’re more focused on the domestic economy and we’ve been achieving and doing so many big things,” he said. “Now we will see a shift from people who want us to invest or take our money to invest from there to calls for co-investments.”