Saudi fund tops Singapore’s GIC with $31.6 billion splurge

Saudi Arabia’s Public Investment Fund emerged as the world’s most active sovereign investor last year, increasing trading activity even as most of its global peers, including GIC Pte and Temasek Holdings Pte, cut spending.

The PIF, known as the Saudi Fund, committed $31.6 billion in 2023, according to research consultancy Global SWF. This is higher than the previous year’s investment of $20.7 billion, an increase that contrasts with the broader trend that global state-owned investors invested $124.7 billion, about one-fifth less than a year earlier. .

The decline was led by GIC, which lost its position as the world’s most active sovereign wealth fund for the first time in six years with a 46% drop in capital injections to $19.9 billion. Temasek also cut new investments by 53% to $6.3 billion due to volatile markets, and two Singapore-based investors reported worsening returns.

Global SWF said much of the decline in GIC was related to investments across developed markets. Singapore’s state-owned investors remain active in emerging markets like India, with deals such as GIC’s $1.4 billion joint venture with Brookfield India REIT and Temasek’s capital increase in Manipal Health Enterprises. I was disappointed.

“Investors in Singapore are becoming more cautious and we can see that reflected in the numbers,” GlobalSWF said. “Sovereign wealth funds in the Gulf have become increasingly dominant in global trading activity, to the detriment of funds in Singapore and Canada, and now control almost 40% of all investments deployed by sovereign investors. is occupying.”

Overall, sovereign wealth funds controlled by the hydrocarbon-rich governments of Abu Dhabi, Saudi Arabia and Qatar occupied fifth place in the list of the top 10 most active funds last year.

This trend is likely to continue. The governments of the United Arab Emirates, Saudi Arabia, Qatar, Kuwait, Oman, and Bahrain will manage approximately $4.4 trillion in total external assets by the end of 2024, two-thirds of which will be managed by sovereign wealth funds. It is said that there is a high possibility. A report published by the International Finance Association in December.

The region is home to a variety of sovereign funds, and with soaring energy prices in 2022 pushing most Gulf government budgets into surplus, the region is becoming increasingly important as a source of funding for international transactions. .

PIF, directly or through its subsidiaries, led the year’s largest government-backed transaction. These include the nearly $5 billion acquisition of US gaming company Scopley through Savvy Games Group and the $3.6 billion acquisition of Standard Chartered’s aviation leasing business through Avilease.

The Saudi fund was also promoting significant domestic deals to support economic diversification, based on plans by Crown Prince Mohammed bin Salman, who is also PIF chairman.

In September, the fund acquired Sabic Basic Industries Corporation’s steel business in a $3.3 billion deal, bringing PIF’s domestic investments to around 42% of its total deployment in 2023.

“The diversity of transactions demonstrates PIF and its subsidiaries’ unparalleled bandwidth and reach,” Global SWF said in the report.