Saudi Arabia is experiencing an economic slump due to the COVID-19 pandemic and the collapse of oil prices.
The kingdom’s sovereign wealth fund, known as the Public Investment Fund (PIF), has an estimated value of nearly $300 billion.
Yasir Al Rumayyan, the Sovereign Wealth Fund’s governor, outlined the fund’s strategy during the early stages of the pandemic.
“We are definitely looking into any opportunities,” expressed Al Rumayyan, identifying a variety of sectors including the airline, gas and oil, and entertainment industries. “They’re all put on hold with the stoppage of the economy. So, we think once the economy has opened up we will see a lot of returns.”
The fund took advantage of fluctuating prices in the global market and invested in blue-chip stocks related to finance, technology, and also entertainment. Earlier this year, PIF had taken a position in the cruise operator, Carnival.
Many of the country’s shares have now changed, but some experts are questioning the country’s investment habits.
“There might be some top-down influence,” said assistant professor Dr. Adeel Malik of Oxford University, citing Saudi Arabia’s Crown Prince, Mohammed Bin Salman, and his interest in a stake of the cruise liner as an example.
“With that investment, people doubt it was the decision of the PIF as such, but (rather) might have been influenced by the royals,” he added. “That is a sort of concern as you need to have an investment committee that is truly independent.”
PIF has ambitions to be, “one of the largest sovereign wealth funds in the world”.
However, some experts believe major modifications would need to take place in order to achieve their goal.
Economist and professor Bernardo Bortolotti of New York University Abu Dhabi believes the country will readjust their strategy in the coming two decades.
“More recently the PIF has announced a significant change in rebalancing of its strategy with attention to the local economy,” says Bortolotti. “A large-scale investment plan has been announced, the plan will be involving several business projects in the economy just for the idea and the objective to develop the economy to create jobs and opportunity for the Saudi people.”
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