An Overview of Saudi Arabia’s Public Investment Fund

Founded in 1971 as the sovereign wealth fund of the Kingdom of Saudi Arabia (KSA), the Public Investment Fund or PIF is one of the largest wealth funds in the world, with an estimated value of at least USD 500 billion.

As Saudi Arabia’s population grows and its long-term goals change—so does the fund’s role, which evolves to accommodate the diversification of the Kingdom’s economy. In 2017, the Public Investment Fund Program was launched to maximize fund investments towards KSA’s goal of increasing its non-oil revenues and strengthening the private sector, as well as establishing strong economic partnerships not just with local partners, but global investors.

PIF Main Objectives

The PIF is guided by its vision statement of being a “global investment powerhouse and the world’s most impactful investor, enabling the creation of new sectors and opportunities that will shape the future global economy while driving the economic transformation of Saudi Arabia.

According to the YCP Solidiance white paper “Partnering for Success in Saudi Arabia Construction,” which explores the long-term diversification of KSA’s economy and its effects on various sectors, the PIF has four program objectives that guide its investments and long-term plans:

• Growth of Assets: the PIF is actively investing in both local and international assets, which helps benefit local growth partnerships in various sectors, including construction.
• Unlocking New Sectors: the PIF wants to bolster development in new sectors all over KSA, including infrastructure and construction development.
• Building Partnerships: The Fund actively wants to pursue partnerships with foreign collaborators, who must take into consideration the value of the overall partnership.
• Localized Knowledge: The PIF is looking for foreign contactors offering a specialized expertise or value to aid local contractors in bringing long-term value to major projects.

With these objectives in mind, the PIF seeks to invest around USD 40 billion annually into the Saudi Arabian economy from 2021 to 2025, creating 1.8 million jobs and helping further economic development as evidenced by strong forays into infrastructure and construction.

The PIF is one of the lead investors affecting KSA’s overall development and is a key project owner in some of the country’s most notable infrastructure projects. Both local and foreign contractors must be aware of the significance of the PIF in Saudi Arabia’s long-term future, and work accordingly to make sure they meet the qualifications needed to be part of a PIF-backed project.