- PIF’s mega-project holdings, including Neom, fell 12.4% to $56.2B in 2024.
- Total assets under management reached nearly $1 trillion, showing fund resilience.
- Lower oil prices and budget pressures push PIF to prioritize domestic projects and high-growth sectors like AI.
Saudi Arabia’s Public Investment Fund (PIF) reported a significant $8 billion write-down in its so-called “gigaprojects” at the close of 2024, even as its total assets under management (AUM) soared to nearly $1 trillion. The move highlights the kingdom’s balancing act between ambitious economic diversification and the realities of a volatile oil market.
Declining Gigaproject Investments
The PIF’s gigaproject holdings, including the $500 billion Neom development, dropped by 12.4% to 211 billion Saudi riyal ($56.2 billion). These projects now account for just 6% of the fund’s total assets, down from 8% in 2023. Analysts cite lower global oil prices and rising budget deficits as key drivers of the write-down, alongside operational complications and cost overruns in large-scale projects like Neom. Estimates place the total cost of Neom between $500 billion and $1.5 trillion, though several segments have been scaled back or shelved.
Asset Growth Amid Market Challenges
Despite the setback, the PIF’s AUM grew 19% year-over-year to around $913 billion, making it one of the world’s largest and fastest-growing sovereign wealth funds. Returns since 2017 have slowed to an annualized 7.2% from 8.7%, reflecting broader economic pressures. Notably, international investments declined from 20% to 17% of the portfolio, as the fund pivoted toward domestic opportunities and high-growth sectors like artificial intelligence.
Strategic Funding and Future Focus
The PIF has broadened its funding base, raising nearly $17 billion through public and private channels, while benefiting from additional allocations of Saudi state oil giant Aramco shares. However, analysts warn that prolonged low oil prices could curb revenue from oil-linked investments, limiting the fund’s capacity to finance new projects.
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Saudi Crown Prince Mohammed bin Salman’s Vision 2030 remains central to the strategy, aiming to diversify the economy, create jobs, and advance technology. While budget pressures temper spending, the PIF continues targeting sectors that promise long-term growth and resilience beyond oil dependence.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
