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Saudi Arabia is experiencing an economic recession due to the COVID-19 pandemic and collapsing 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 governor of the Sovereign Wealth Fund, outlined the fund’s strategy during the early stages of the pandemic.
“We are definitely looking for opportunities,” Al Rumayyan said, identifying a variety of sectors including the airline, oil and gas, and entertainment industries. “Everyone is paralyzed with the unemployment of the economy. Therefore, we believe that once the economy has opened, we will see a lot of returns. “
The fund took advantage of fluctuating prices in the global market and invested in world-class stocks related to finance, technology and also entertainment. Earlier this year, PIF had taken a position in cruise operator Carnival.
Many of the country’s stocks have now changed, but some experts are questioning the country’s investment habits.
“There could be some top-down influence,” said Oxford University assistant professor Dr. Adeel Malik, citing Saudi Crown Prince Mohammed Bin Salman and his interest in a participation in the cruise as an example.
“With that investment, people doubt that it was the PIF’s decision as such, but (rather) it could have been influenced by royalty,” he added. “That’s kind of a concern, as you need to have an investment committee that’s truly independent.
Future perspectives
PIF has the ambition to be “one of the largest sovereign wealth funds in the world”.
However, some experts believe that major modifications would be necessary to achieve their goal.
Economist and professor Bernardo Bortolotti of New York University in Abu Dhabi believes that the country will readjust its strategy in the next two decades.
“More recently, the PIF has announced a significant change in the rebalancing of its strategy with attention to the local economy,” says Bortolotti. “A large-scale investment plan has been announced, the plan will involve various commercial projects in the economy just for the idea and goal of developing the economy to create jobs and opportunities for the Saudi people.”
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