Public Investment Fund: Strategic Driver of Saudi Economy

The Public Investment Fund was established in 1971 in the Kingdom of Saudi Arabia under the name "Saudi Industrial Development Fund." Initially, it aimed to support local industrial projects and enhance the growth of the industrial sector. Over time, as development requirements changed, the fund's importance grew to become a comprehensive investment tool. The fund underwent a qualitative shift after 2015 when a royal decree was issued to restructure it and expand its mandate, making it the most prominent executive arm of Vision 2030. Under direct supervision from Saudi leadership, the fund's investments expanded to include major national projects in renewable energy, tourism, entertainment, technology, and military industry sectors. This shift has reinforced the fund's position as a key player in the national economy, transforming it into a tool for directing government investments towards economic diversification and sustainable development.

The Public Investment Fund enjoys a unique and special status in the Saudi economy, as it is not considered a publicly listed company in the Saudi financial market like other companies; rather, it is a fully government-owned sovereign entity. Its uniqueness lies in the fact that it does not issue public shares, and individuals cannot invest in it directly. Instead, it funds itself through government allocations and, at times, through debt instruments or short-term securities such as sukuk and bonds. The fund's movements and investments often influence investor confidence in the Saudi market, especially when it injects large capital into specific companies or sectors, as it is viewed as an indicator of the state's direction in supporting certain economic sectors. The fund also plays a pivotal role in supporting major national companies, financing infrastructure projects, and enhancing the Kingdom's attractiveness for local and foreign investment.

The Public Investment Fund is based on a set of strategic objectives that align with the directions of Vision 2030. Among the most prominent of these objectives are: implementing major national projects that are difficult to develop solely by the private sector; generating sustainable financial returns that enhance national reserves; supporting the growth of non-oil exports; and enabling the private sector to expand into new strategic areas. The fund also seeks to enhance the Kingdom's position on the global economic stage through international partnerships and alliances, investments in technology, renewable energy, and artificial intelligence sectors, in addition to its role in developing national human capabilities through investments in education and training. These objectives reflect the fund's commitment to achieving a balance between local development and contributing to the global economy.

Official data for 2024 shows that the Public Investment Fund continues to achieve strong growth in assets under management (AuM). The fund recorded a 19% increase in the size of managed assets during 2024, making it one of the largest sovereign wealth funds globally. Although precise asset value figures have not been disclosed, estimates suggest that they exceeded trillions of riyals by the end of the year. The fund's total revenues also grew by 25% compared to 2023, while cumulative investments in priority sectors surpassed $171 billion since 2021. This financial performance reflects the fund's ability to diversify revenue sources and inject strategic investments into national and global projects, ensuring sustainable returns and enhancing the financial position of the Kingdom of Saudi Arabia.

The Public Investment Fund relies on a mix of government allocations, investment returns, and short- and long-term debt instruments such as sukuk and bonds to fund its activities. In 2025, the fund launched a short-term commercial paper program in foreign currencies (dollars and euros) to enhance its financial flexibility and diversify liquidity sources. These instruments received an A-1 credit rating from Standard & Poor's, reflecting the fund's strong financial position, liquidity quality, and governance. This rating is evidence of global financial markets' confidence in the fund's ability to meet its obligations, granting it greater flexibility in financing its large projects without relying entirely on direct government funding.

Since the Public Investment Fund is not a publicly listed company in the Saudi financial market, traditional indicators such as stock price, market capitalization, or price-to-earnings (P/E) ratio do not apply to it. The fund's performance evaluation relies on its annual reports, which review growth indicators in assets, revenues, and liquidity. The fund's operations are subject to oversight by government entities such as the General Auditing Bureau, and periodic reports on its financial and investment performance are published. In 2024, a new governance regulation was issued for the fund aimed at enhancing decision-making transparency and improving internal control quality, in line with international standards. This transparency contributes to building trust among local and international investors in the fund's strategic and financial role.

The Public Investment Fund is characterized by diversifying its investment portfolio across several strategic sectors both locally and globally. These sectors include: energy and natural resources (oil, gas, renewable energy), industry and manufacturing (petrochemicals, mining, metals, basic materials), real estate, infrastructure, and tourism (projects such as Qiddiya, the Red Sea, NEOM), financial and technology services (investments in global tech companies, venture capital funds), entertainment, media, and sports (establishing and developing sports clubs, major media and entertainment projects), and defense and security (investments in local and global defense companies). This diversity reflects the fund's commitment to supporting national economic growth and achieving sustainability across multiple sectors.

The Public Investment Fund is one of the key pillars for achieving Saudi Vision 2030. The fund is tasked with investing in major national projects that the private sector cannot implement alone, such as NEOM, the Red Sea, and Qiddiya projects. It also invests in developing new sectors such as tourism, entertainment, technology, and renewable energy, contributing to diversifying national income sources and reducing dependence on oil. The fund also works to enhance international partnerships and attract foreign investments through collaborations with major global companies and funds. With the support of Saudi leadership, the fund continues its role as a key driver of economic transformation programs while maintaining a balance between local development and contributing to the global economy.

The Public Investment Fund finances a range of giant national projects aimed at creating economic and social transformation in the Kingdom. Among the most notable of these projects are: the NEOM project, which is a futuristic city relying on renewable energy and modern technologies; the Qiddiya project, which is a comprehensive entertainment and sports city; the Red Sea project, focusing on luxury tourism and sustainable development; in addition to advanced infrastructure projects such as smart transportation routes, airports, and advanced communication networks. The fund also participates in developing military industries and stimulating innovation in technology and medical sectors. These projects not only enhance economic growth but also contribute to job creation and the development of national human capital.

The Public Investment Fund places great importance on expanding its investments outside the Kingdom, as it seeks to diversify its portfolio and reduce risks associated with local markets only. The fund has entered into partnerships with sovereign wealth funds and major global companies, investing in sectors such as technology, renewable energy, healthcare, and biotechnology. For example, the fund has signed agreements with Japanese institutions to finance technology and industrial projects and participated in financing venture capital funds in collaboration with institutions like BlackRock and SoftBank. These partnerships reflect Saudi ambition to make the fund a global player in financial markets, bringing advanced expertise and technologies to the Kingdom.

As of the end of 2025, the Public Investment Fund has not been listed on the Saudi stock market (Tadawul), and thus there are no shares or financial instruments representing public ownership in the fund. This means that individual and institutional investors cannot invest directly in the fund, but they can benefit from its performance indirectly by investing in listed companies in which the fund holds stakes or supports through its investments. There is also a trend towards offering some of the fund's subsidiaries for public subscription in the future, providing investors with new opportunities to participate in the growth driven by the fund. However, the ownership of the fund and its investment decisions remain in the hands of the Saudi government, focusing on national strategic objectives.

There is no direct competitor to the Public Investment Fund within the Saudi market, given its nature as a state-owned sovereign fund. Other funds, such as the Industrial Development Fund or Agricultural Fund, operate in specific sectors and on a much smaller scale. At the regional and global levels, the fund is compared with other sovereign funds such as the Abu Dhabi Investment Authority, the Qatar Sovereign Fund, and the Kuwait Sovereign Fund. The advantage of the Public Investment Fund lies in its comprehensive developmental strategy, direct support for national transformation projects, and its ability to attract international investments and major partnerships. This position grants it a leadership role in directing the Saudi economy towards further diversification and sustainability.

In recent years, the Public Investment Fund has witnessed significant developments in terms of financial performance and new projects. In 2024, the fund announced a 25% growth in its revenues, with cumulative investments exceeding $171 billion since 2021 in priority sectors. It also launched short-term commercial paper programs in foreign currencies, receiving a high credit rating (A-1) from Standard & Poor's. The fund continued to finance strategic projects such as NEOM, Qiddiya, and the Red Sea, and enhanced its international partnerships in technology and energy sectors. The fund also issued new governance regulations aimed at increasing transparency and oversight of its activities. Following these developments, expectations are that the fund will continue its leading role in supporting Saudi economic development and attracting foreign investments.

Despite the Public Investment Fund's successes in achieving growth in assets and revenues, it faces challenges related to the need to maintain sustainable growth and diversify its investment portfolio amid global economic fluctuations. Among these challenges is the need to develop new financial instruments, enhance transparency and governance, and attract specialized human competencies. Conversely, the fund has promising opportunities, the most notable of which are the potential expansion into green investments and modern technologies, increasing international partnerships, and offering subsidiaries for public subscription. The fund can also benefit from the momentum of Vision 2030 and ongoing government support to enhance its position as a key driver of the Saudi economy in the coming years.