Saudi Arabia’s Public Investment Fund (PIF) is unrecognizable from the sleepy vehicle it was until 2015.
The COVID-19 pandemic has proven to be the moment the $350 billion fund was made for, encouraging it to take advantage of the emerging opportunities by betting on contrarian views, taking bold steps to look beyond the crisis and shaping the narrative around the future of sustainable and impactful investing.
But aside from the eye-watering financial performance that has led PIF to double in volume from SR560 billion ($149 billion) in 2015 to the current SR1.3 trillion ($350 billion), it is its ambition to become the world’s leading impact investor that has led to it being applauded as the world’s first activist and indeed futurist sovereign wealth funds.
When in mid-November Saudi Arabia’s Crown Prince Mohammed bin Salman saluted the Kingdom’s extraordinary achievements while commenting on King Salman’s address to the Shoura Council, he was referring to the transformational journey of one of the world’s largest and most influential sovereign wealth funds: Saudi Arabia’s PIF.
Already before the COVID-19 pandemic wreaked economic carnage across the globe, PIF was being lauded for using impact investment to pursue reform for the sake of future generations. Now, the fund has reinforced this position thanks to bold and contrarian investments such as a 7.3 percent holding in Carnival — making it the second-largest shareholder in the world’s biggest cruise line operator — Walt Disney and Boeing, all acquired during the depths of the pandemic. Other earlier investments, such as its investment in UK HealthTech startup Babylon in 2019 and in American drug producer Pfizer in Q1 2020, now appear as very wise bets in hindsight.
But looking back through PIF’s remarkable journey of growth and transformation over the past five years suggests that far from being an accident, this evolution has occurred as a result of an extraordinary vision embedded within the bold objectives of the Kingdom’s Vision 2030. This vision to embrace financial activism to ensure a sustainable future has empowered the fund to marry impact investment with achieving above-benchmark financial returns and long-term value for the Kingdom’s nearly 20 million young men and women under the age of 35.
Already before the COVID-19 pandemic wreaked economic carnage across the globe, PIF was being lauded for using impact investment to pursue reform for the sake of future generations.
Since it fell under Crown Prince Mohammed bin Salman’s stewardship in 2015, PIF has not been shy about its ambition of becoming the world’s most impactful investor and indeed the largest sovereign wealth fund. But it was the COVID-19 pandemic that provided an opportunity for PIF to show its worth, by not only making bold investments but also shaping the narrative around what the future of investing should look like and what the role of investors should be. For example, on the latter point, by hosting the Future Investment Initiative (FII) and its sister organization the FII Institute, PIF has created a key forum for coordination of policy and action to discuss and propose practical solutions for some of the most critical issues of our time.
As we look ahead into the next 10 years that will lead to the Kingdom’s 2030 goals, PIF’s ability to deeply embed GreenTech, CleanTech and HealthTech into its agenda will ensure that it consolidates its position as the world’s first activist and futurist sovereign wealth fund.
Over the next decade, PIF has an opportunity to lead the way on a sustainable recovery path, which is not only desirable but also more efficient in creating jobs and delivering financial returns, by prioritising investments in nature-based solutions and by shaping the culture of change. As the COVID-19 pandemic has exposed both the risks and the costs of neglecting our natural environment and our planet, PIF has a rare opportunity to lead this shift in the conversation.
- Roxana Mohammadian-Molina is an adviser to tech companies across the GCC, and chief strategy officer and board member at London-based financial technology company Blend Network. A former banker at Morgan Stanley in London, she now sits on the board of Women in Finance 2020 and focuses on investing in, growing, and advising tech companies.