Saudi Public Investment Fund consolidates its position as a financial powerhouse for European assets

Saudi Arabia's Public Investment Fund (PIF) is strategically increasing its presence in Europe. As one of the world's most powerful funds, which manages more than $941 billion, it is a key part of the country's most important national project: Vision2030. 

It is in this context of increasingly intense competition with other Gulf states, such as the United Arab Emirates and Qatar, that the PIF wants to position itself as Europe's leading investor. 

The commitment to the European bloc is not only a question of profitability, but also a declaration of intent regarding the new geo-economic role that Saudi Arabia seeks to play in the coming years.

During the European Priority Summit held in Tirana, the capital of Albania, the fund's governor, Yasir Al-Rumayyan, told the media of the intention to double Saudi investments in European assets, reaching a volume of up to $170 billion, starting from $85 billion accumulated between 2017 and 2023; and aims to reach $1 billion in investments by 2030. 

This plan, as we have noted above, is part of the Arab giant's strategic vision: Vision2030, whose roadmap, promoted by Crown Prince Mohammed bin Salman, seeks to diversify the national economy, historically dependent on oil.

PIF, currently the second largest in the Gulf and managing more than $941 billion in assets, acts as the leading financial institution in this transformation, with investments ranging from tourism, sports and entertainment to technology, defence and automotive.  

Al-Rumayyan, a key figure in the Saudi financial architecture who is also chair of Aramco and of English club Newcastle United, stressed that "Europe is a key part of their global strategy because of its regulatory stability and long-term potential". 

This love for the European economy is because in nine years, FIP's international investments represent 30 % of its portfolio, compared to only 2 % nine years ago. International expansion also responds to the need to compensate for falling foreign direct investment, persistent fiscal deficits, and fluctuating oil prices. 

Nevertheless, the fund has played a crucial role in job creation and economic momentum in Europe. Saudi Arabia has created 103 companies in sectors such as tourism, Artificial Intelligence, and entertainment. In addition, Saudi investments have generated approximately 254,000 jobs and contribute some $52 billion annually to European GDP, figures that are expected to double by 2030.

Moreover, the sectoral diversification of the FIP is investing heavily in the private sector. In recent years, the Fund has acquired stakes in key companies such as Heathrow Airport and US electric vehicle manufacturer Lucid, as well as a 30% stake in Italian luxury supercar manufacturer Pagani. 

However, one of the most significant changes in the Fund's direction is investment in emerging sectors. Industries such as tourism and artificial intelligence now account for a third of the fund's investments, up from a fifth last year. 

This increase in investor confidence in these new sectors demonstrates the shift towards strategic investments that drive sectors considered vital to future economic growth. 

Despite challenges such as falling dividends from Aramco, of which it owns 16%, Saudi Arabia is relying on the PIF to sustain its ambitions, including the hosting of the 2034 FIFA World Cup, through which the government is relying on the wealth fund, which aims to increase its contribution and the creation of approximately 1.8 million direct and indirect jobs.