The Public Investment Fund (PIF) is the main sovereign investment entity in the Kingdom of Saudi Arabia, representing one of the state's tools to achieve economic diversification and stimulate growth away from traditional reliance on the oil sector. Established in 1971 as the government's investment arm, PIF has undergone a radical transformation in its strategy since 2015 to become a cornerstone in achieving the objectives of Vision 2030. In recent years, PIF's pivotal role in the Saudi financial market has escalated through massive investments in diverse sectors such as energy, technology, tourism, infrastructure, and industry.
In this comprehensive guide, we explore the history of the Public Investment Fund, its objectives, governance structure, key domestic and international investments, its relationship with the Saudi financial market, recent financial indicators, and the latest developments and news related to it. We also clarify the fundamental differences between PIF and listed companies on Tadawul, focusing on its impact on the national economy, and address the most frequently asked questions about the fund. You will find in this article everything you need to understand the nature of the Public Investment Fund, its operational mechanisms, and its increasing significance in shaping the future of investment in the Kingdom, fully adhering to disclosure and neutrality regulations as per the Capital Market Authority's guidelines.
The Origins and Historical Development of the Public Investment Fund (PIF)
The Public Investment Fund (PIF) was established in 1971 by royal decree to be the governmental institution responsible for investing the Kingdom's wealth and providing financing for major national projects. In its early days, the fund focused on financing strategic developmental projects and supporting the industrial and infrastructure sectors, operating under the supervision of the Saudi Ministry of Finance.
In 2015, the fund witnessed a significant turning point when it was restructured and directly linked to the Council of Economic and Development Affairs chaired by Crown Prince Mohammed bin Salman. This step was part of a package of reforms aimed at achieving the objectives of Vision 2030, where PIF became one of the main pillars for diversifying the national economy and reducing dependence on oil.
Since then, the fund's powers have expanded, and its investment strategy has been reshaped to become a key player in both the local and global economy. Its role has evolved from merely financing government projects to becoming an active investment engine that initiates the establishment of companies and leads major transformations in the Saudi economy. Today, the fund continues to expand its investment portfolio both locally and internationally, focusing on promising sectors that add value to the national economy.
Organizational Structure and Governance of a Sovereign Institution
The Public Investment Fund has a unique organizational structure that distinguishes it from traditional financial institutions in the Kingdom. The board of directors is chaired by His Royal Highness Crown Prince Mohammed bin Salman bin Abdulaziz, which grants it strategic weight and enhances its ability to coordinate with the highest decision-making bodies in the state.
The board consists of a select group of government leaders and financial experts, ensuring that the fund's investment policies align with long-term national goals. The fund also includes specialized departments for local and global investments, asset management, risk, governance, and institutional development, in addition to a team of over 3,000 employees by the end of 2024.
The fund is closely linked to the Council of Economic and Development Affairs and is subject to local regulatory frameworks, including the Saudi Capital Market Authority, while retaining high flexibility in executing its projects and investments. This organizational structure is a key factor in the fund's success and its ability to develop and implement massive and integrated investment strategies.
Objectives of the Public Investment Fund in the Saudi Economy
The main objectives of the Public Investment Fund focus on achieving several strategic axes, including:
1. Diversifying national income sources: through extensive investments in non-oil sectors such as technology, tourism, entertainment, and industry.
2. Maximizing returns on government investments: by managing government assets and achieving the best possible returns in the medium and long term.
3. Creating new job opportunities: by establishing major national companies and quality projects that contribute to employing Saudi talents.
4. Supporting major strategic projects (the five major projects such as NEOM, Qiddiya, the Red Sea, AlUla, and Amaala).
5. Enhancing the Kingdom's global position as an investment hub and attracting foreign investments.
6. Developing local capital markets by supporting issuances and bonds and participating in listed companies.
These objectives align with Saudi Vision 2030, as the PIF strategy is designed to be the main arm in implementing national transformation programs and achieving comprehensive sustainable development.
Asset Size and Recent Financial Indicators of the Public Investment Fund
The Public Investment Fund is classified among the largest sovereign funds globally in terms of asset size. According to the latest data, the fund's assets reached approximately 4.32 trillion Saudi Riyals (over 1.15 trillion USD) by the end of 2024.
The fund recorded operational revenues of 413.4 billion Riyals for 2024, compared to 331.3 billion Riyals in 2023, indicating an annual growth rate of nearly 25%. The net income reached 25.8 billion Riyals in 2024, noting a decline from the previous year, which saw a net profit of 64.4 billion Riyals. This fluctuation is attributed to asset valuation changes and some accounting and strategic factors related to portfolio restructuring.
The fund's equity amounted to 2.47 trillion Riyals, and the number of companies in its portfolio increased to over 220 (including more than 100 companies established by the fund itself). These indicators reflect the fund's ability to grow and achieve a wide-ranging economic impact.
It is worth noting that the fund does not have a share price or market value like listed companies, as its units or shares are not traded in the Saudi financial market.
How PIF Works: Nature of Investments and Operational Mechanisms
The operations of the Public Investment Fund differ from those of listed companies or traditional investment funds; it is a sovereign entity fully owned by the state and not publicly offered. The fund invests across a wide range of sectors through various instruments such as:
- Direct investment in major national companies.
- Acquiring significant stakes in listed companies (such as STC and ACWA Power).
- Establishing new companies in strategic sectors.
- Investing in real estate assets and infrastructure projects.
- Global partnerships and external investments in technology, energy, financial markets, and more.
The fund follows strict governance standards in risk management and asset allocation, relying on specialized teams to study opportunities and execute projects. It seeks to balance financial returns with developmental impact, as profits are reinvested to support new projects and achieve the objectives of Vision 2030.
The Relationship Between PIF and the Saudi Financial Market (Tadawul)
Although the Public Investment Fund does not offer its shares in the Saudi financial market (Tadawul), it has a significant impact on market performance and listed companies. The fund holds influential stakes in leading companies such as Saudi Telecom (STC), ACWA Power, and several petrochemical, industrial, and banking companies.
The fund sometimes sells or buys stakes in these companies as part of its strategy to redistribute investments or achieve liquidity to support new projects. An example is the sale of 48 million shares in "Umm Al-Qura for Development and Construction (Masar)" during 2025.
The fund also contributes to supporting liquidity in capital markets by investing in sukuk and bonds and launching investment funds that support local market growth. This interaction makes PIF a key player in driving trading and investment in the Saudi stock exchange, albeit indirectly.
Key Sectors and Strategic Projects in PIF's Portfolio
The Public Investment Fund's investments span over 13 vital sectors, including:
- Renewable energy and petrochemicals: through companies like ACWA Power and SPARK.
- Infrastructure: massive investments in ports, transportation, water, and electricity.
- Technology and innovation: establishing tech companies like "Sky" specializing in artificial intelligence.
- Entertainment and tourism: mega projects like NEOM, Qiddiya, the Red Sea, Amaala, and AlUla.
- Industry: supporting companies like Dussur for manufacturing.
- Health: investments in hospitals and biotech companies.
- Financial services, insurance, and banking.
These investments aim to achieve economic integration and enhance local value, focusing on building new sectors that attract talent, create job opportunities, and support sustainable development.
The Impact of the Public Investment Fund on Vision 2030
The Public Investment Fund plays a pivotal role in implementing the programs of Vision 2030, as it has been tasked with leading the economic transformation process and diversifying income sources away from oil. Through its investment strategies, the fund aims to increase its contribution to the non-oil GDP by approximately 2 trillion Saudi Riyals by 2030.
This is achieved through financing massive projects (such as mega cities), developing new sectors like technology, tourism, entertainment, and industry, and enhancing the local business environment to attract foreign direct investment. The fund also supports initiatives for developing human capital, training programs, localization, and localizing value chains in strategic industries.
These efforts confirm that PIF is not just a financial investor but a strategic partner in building a diverse and sustainable Saudi economy, acting as an executive tool to achieve the objectives of the national vision.
Comparing PIF with Global Sovereign Funds
The Public Investment Fund is among the largest sovereign funds in the world in terms of assets under management, competing with established sovereign institutions such as the Abu Dhabi Investment Authority (ADIA), the Norwegian Sovereign Wealth Fund, and the Qatari and Kuwaiti investment funds.
PIF's strategy is characterized by a high focus on local development, establishing quality projects within Saudi Arabia, alongside carefully selected global investments. Unlike some funds that focus solely on financial returns, PIF balances financial returns with economic and social impact.
The Kingdom benefits from the fund's flexibility in executing diverse investments, granting it a competitive edge in attracting international investment opportunities and contributing to enhancing Saudi Arabia's position as a global financial and investment hub.
Fundamental Differences Between the Public Investment Fund and Listed Companies
Although the Public Investment Fund is considered a key player in the Saudi financial market, it fundamentally differs from listed companies in several aspects:
- Ownership: PIF is fully owned by the state and does not offer its shares for public subscription or trading.
- Financial Reporting: The fund is not subject to the same quarterly or annual disclosure models as listed companies but announces aggregated financial data.
- Financial Indicators: There is no share price, price-to-earnings ratio, or traditional dividends as in companies.
- Objectives: The fund focuses on economic returns and long-term development, not just annual profitability.
- Impact: The fund influences the market through its ownership stakes in listed companies, without being part of the main market indices.
This difference reflects the sovereign nature of the fund, granting it flexibility in executing strategic investments that are not constrained by short-term market considerations.
Recent Developments and News About the Public Investment Fund (2024-2025)
The Public Investment Fund witnessed several notable developments in 2024 and 2025:
- Completion of the sale of 48 million shares in "Umm Al-Qura for Development and Construction (Masar)" as part of the investment redistribution strategy.
- The fund received a high credit rating (A-1) from Standard & Poor's with a stable outlook.
- Signing strategic partnerships with companies like ACWA Power, Microsoft, and the Saudi Information Technology Company.
- Expansion of the financial market program by supporting government issuances and bonds, injecting liquidity into the local market.
- Implementation of quality global investments, such as participation in the first exchange-traded bond fund in European markets.
- Continued announcements of major projects and cities like NEOM, Amaala, and AlUla, along with programs to develop the national workforce in technology sectors.
These developments reflect the fund's ability to keep pace with global economic transformations and respond flexibly to local development requirements.
Key Partners and Notable Investments of the Public Investment Fund
The Public Investment Fund has a diverse portfolio of partnerships and notable investments both locally and internationally. Among the prominent partners and companies in which the fund holds significant stakes are:
- Saudi Telecom (STC): one of the largest shareholders.
- ACWA Power: a major contributor in the energy and water sector.
- Mega project companies: NEOM, the Red Sea, Qiddiya, AlUla, and Amaala.
- Industrial and tech companies: Dussur, Sky, SPARK.
- Global partnerships: investments in major tech companies and global investment funds, participation in the "SoftBank Vision Fund," and acquisitions in Japanese and European companies.
These partnerships aim to enhance local value, transfer technology, localize expertise, attract foreign investment, and position Saudi Arabia as a pivot in the global economy.
Opportunities and Challenges Facing PIF in the Coming Phase
The Public Investment Fund faces numerous opportunities along with some challenges in the context of the significant transformation taking place in the Kingdom:
- Opportunities: expansion into promising sectors such as artificial intelligence, renewable energy, tourism, and fintech. Supporting startups and entrepreneurial projects. Attracting international partnerships and technology transfer.
- Challenges: fluctuations in global markets, transparency and disclosure requirements, risk management in large and long-term investments. Balancing financial goals with developmental impact and achieving localization and job creation targets.
The fund addresses these challenges through strong governance policies, diversifying its investment portfolio, and fostering innovation. Recent financial indicators and achievements affirm PIF's ability to overcome obstacles and achieve its strategic objectives amidst local and international changes.
How Individuals Can Benefit from the Activities of the Public Investment Fund
Although the Public Investment Fund is not available for direct investment by individuals or small investors (i.e., shares or units cannot be purchased), its impact on the market and local economy indirectly benefits the general public:
- Job creation: through establishing new companies or expanding into emerging sectors.
- Supporting vital sectors: such as health, education, entertainment, and technology, which reflects on quality of life.
- Enhancing the financial market: supporting listed companies, which may affect stock performance on Tadawul.
- Financial programs and mutual funds: launching initiatives that support small investors and entrepreneurs.
To benefit from the fund's impact, individuals can follow the companies in which PIF invests or take advantage of the programs and initiatives announced periodically to support new sectors and develop national competencies.
Conclusion
The Public Investment Fund (PIF) has become the main driver of economic transformation in the Kingdom of Saudi Arabia, based on an ambitious vision and an integrated investment strategy that supports economic diversification and the development of non-oil sectors. Through its management of a massive asset portfolio and the establishment of quality projects and local and international partnerships, the fund has a wide-ranging impact on the Saudi financial market and the national economy in general.
Although the fund does not offer its shares for trading and direct investment by individuals is not possible, its indirect impact on market growth, job creation, and the development of vital sectors makes it a cornerstone in the Kingdom's economic future.
To maximize investment opportunities in the Saudi market, it is always advisable to stay updated on developments related to PIF's activities and monitor the listed companies and relevant financial indicators. The SIGMIX platform emphasizes the importance of consulting a licensed financial advisor before making any investment decisions to ensure alignment with personal goals and financial circumstances.
Frequently Asked Questions
The Public Investment Fund is the sovereign fund of the Kingdom of Saudi Arabia, established in 1971, aimed at managing state wealth and diversifying the economy away from oil. The fund leads government investments in local and global sectors, serving as a developmental arm to achieve the objectives of Vision 2030 by establishing major national companies and financing strategic projects.
Individuals or small investors cannot buy shares or investment units in the Public Investment Fund, as it is a sovereign entity fully owned by the state and not listed in the financial market. However, they can benefit indirectly from its activities through listed companies in which it holds stakes or through initiatives and programs it launches to support specific sectors.
By the end of 2024, the fund's assets reached approximately 4.32 trillion Riyals, with operational revenues of 413.4 billion Riyals and a net income of 25.8 billion Riyals. The fund does not have traditional indicators like share price or price-to-earnings ratio, and its successes are measured by asset growth and long-term economic impact.
The Public Investment Fund affects Tadawul indirectly through its strategic stakes in major listed companies, buying and selling shares as part of its investment strategy. It also supports liquidity in the market by investing in sukuk and bonds and launching new investment funds, enhancing the depth and growth of the financial market.
The fund is closely linked to Vision 2030, as it is the main investment arm to achieve economic transformation and diversify income sources. The fund leads major strategic projects and contributes to developing new sectors, targeting a significant increase in its contribution to the non-oil GDP by 2030.
The Public Investment Fund does not distribute cash dividends to investors, as it is not a joint-stock company and does not have traditional shareholders. The fund's profits are reinvested in new projects or used to support national development goals according to its long-term strategy.
The Public Investment Fund invests in a wide range of sectors including renewable energy and petrochemicals, infrastructure, technology, entertainment, tourism, industry, health, and financial services. Through these investments, the fund aims to diversify the Saudi economy and create new jobs.
There are no direct competitors to the Public Investment Fund within Saudi Arabia, as it is the main sovereign entity for managing government investments. However, globally, the fund is compared to its peers from sovereign funds in countries like the UAE, Norway, Qatar, and Kuwait.
Individuals can benefit indirectly from PIF's projects and programs through new job opportunities created by companies established or invested in by the fund, and through training programs and initiatives that support entrepreneurs and emerging sectors. Local investors can also benefit from the performance of listed companies in which the fund holds stakes.
Recent developments in 2024 and 2025 include selling stakes in listed companies, signing partnerships with major firms like ACWA Power and Microsoft, receiving a high credit rating, launching investments in European index funds, and expanding programs to support the Saudi financial market. These developments reflect the fund's ongoing leadership in economic transformation and achieving the objectives of Vision 2030.