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Saudi Arabia’s Crown Prince Mohammed bin Salman sits before a working lunch at the G20 Summit in Nusa Dua, Indonesia, on November 15, 2022. Leon Neal—Getty Images
Saudi Arabia’s Public Investment Fund (PIF) is at the forefront of the kingdom’s efforts to diversify from an oil-dependent economy, with a focus on technology, sports and airlines. Now, the company has been gifted a $163 billion stake in Saudi Aramco, one of the world’s most profitable publicly traded companies, by Crown Prince Mohammed bin Salman.
According to the Saudi state news agency, the crown prince announced on Thursday the completion of the transfer of 8% of Saudi Aramco, the crown jewel of the country’s economy, to PIF. The 8% stake is worth about $163 billion, roughly equal to Uber’s entire market capitalization.
This is the third time that PIF has increased its stake in Aramco. The fund will hold a 4% stake starting in 2022, with PIF-owned investment company Sanabil holding a further 4% stake.
PIF and PIF-related companies currently own 16% of Saudi Aramco, valued at $327 billion, or the market capitalization of Samsung Electronics and Home Depot.
The country’s state news agency said the move was “a continuation of Saudi Arabia’s long-term efforts to revitalize and diversify the national economy” in line with the country’s Vision 2030 strategy.
Aramco reported full-year profit of $161.1 billion in 2022 on the back of rising energy prices. This figure is the largest annual profit ever achieved by an oil and gas company. Aramco is scheduled to announce its full-year 2023 results on March 11.
What is Vision 2030?
The Public Investment Fund was established in 1971 and has recently taken on a more prominent role in Saudi Arabia and Crown Prince Mohammed bin Salman’s Vision 2030 to diversify the country’s economy and reduce its dependence on the oil industry. . The fund has more than $700 billion under management and is a major investor in the technology sector, having poured money into SoftBank’s Vision Fund and Uber.
But PIF has also made some high-profile investments in industries such as aviation, sports and video games.
The fund supports Riyadh Air, Saudi Arabia’s second flag carrier, in its mission to expand the country’s air reach and transform it into a regional transportation hub.
It has also invested nearly $40 billion in Savvy Gaming Group, a gaming subsidiary aimed at gaining a foothold in the roughly $180 billion video game industry. Last year, the group acquired Scopely, the developer of Monopoly Go and Marvel Strike Force, for $4.9 billion. The fund also invests in established video game publishers, making it the largest outside investor in Nintendo, for example.
But it is PIF’s investments in the world of sports that have garnered the most attention and controversy.
PIF owns the four biggest clubs in the Saudi league (Cristiano Ronaldo currently plays for PIF-owned Saudi club Al Nasr FC) and England’s Newcastle Football Club. PIF also supports LIV Golf, which is currently part of the league. Merger talks with the PGA Tour.
Critics have called these investments “sportswash,” or an attempt to use investments in professional sports to repair Saudi Arabia’s reputation after the killing of Jamal Khashoggi at the Saudi consulate in Istanbul in 2018. I have decided that there is.
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