Saudi Fund Surpasses Singapore's GIC, Splurges $31.6B: Global SWF Dominance

03 Jan, 2024

Saudi Arabia's Public Investment Fund (PIF) emerged as the world's most active sovereign investor in 2023

showcasing a remarkable increase in deal activity amid a broader decline in spending by global peers like GIC Pte and Temasek Holdings Pte.

According to research consultancy Global SWF, PIF deployed a substantial $31.6 billion, surpassing its previous year's investment of $20.7 billion. This stands in contrast to the global trend, where state-owned investors globally deployed $124.7 billion, about a fifth less than the prior year.

The decline in global investments was notably led by GIC, experiencing a 46% reduction to $19.9 billion, relinquishing its position as the world's most active sovereign wealth fund for the first time in six years. Temasek also scaled back new investments by 53% to $6.3 billion amid volatile markets, resulting in worsening returns for both Singapore-based investors.

Global SWF attributed much of GIC's decline to investments in developed markets, while Singapore's state investors remained active in emerging markets like India. Gulf sovereign wealth funds, particularly those from Saudi Arabia, demonstrated increased domination in global transaction activity, representing almost 40% of all investment value deployed by sovereign investors.

The trajectory suggests continued dominance by hydrocarbon-rich governments of Abu Dhabi, Saudi Arabia, and Qatar, with the region expected to control about $4.4 trillion in gross foreign assets by the end of 2024, a significant portion managed by sovereign wealth funds, according to a report by the Institute of International Finance. The surge in energy prices in 2022 has positioned sovereign funds from the Gulf as prominent sources of cash for international deals, reflecting a dynamic shift in the global investment landscape.

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