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Saudi Arabia is a place that is often synonymous with head-spinning levels of wealth, as well as an economy that is singularly focused on oil. This lack of diversification in the Saudi economy is one of the main reasons why the country is one of the largest senders of foreign direct investment (FDI) around the world.
Much of the investments made by the Saudi Central Bank are owned and managed by the Saudi Public Investment Fund, one of the largest sovereign wealth funds on the planet with more than $347 billion in assets under management.
The purpose of the fund is to shore up the wealth and long-term financial viability of the Kingdom, especially in a post-oil world. But what is actually contained in the Saudi Public Investment Fund? Read on to find out.
1. Hot-Ticket Tech Companies
Most of the headline-grabbing moves by the PIF concern the acquisitions of major stakes in hot-ticket tech unicorns over the years. Perhaps most famously, the Fund was an early investor in Uber and now owns billions of dollars worth of shares. The Fund also has substantial stakes in Tesla.
The Fund's representatives are frequent visitors to Silicon Valley, which helps to explain the tech-heavy composition of the Fund; they also own huge amounts of shares in Facebook and WeWork (the latter of which has resulted in massive losses for the Fund). More recently, the Fund has been investing heavily in the video gaming industry, with multi-billion-dollar stakes in gaming titans such as Electronic Arts and Activision Blizzard.
2. Fortune 500 Shares
The PIF is not all about flashy tech company investments. Many of its most valuable holdings are closer to Wall Street than Silicon Valley. For example, the Fund has undisclosed holdings in blue-chip companies such as General Electric, Lockheed Martin, and Berkshire Hathaway. However, the Fund is known to have reduced its exposure to large American companies in recent months, as part of a larger push to diversify its holdings.
3. Precious Metals
Gold might be the oldest asset in existence, but that doesn't make it passé. The Saudi Bank is thought to hold around 322 tonnes of gold, among one of the largest in the world and more than twice as much as previously thought. The resilience and reliability of gold mean that it will likely be a mainstay of the PIF for some time.
Even small-scale, retail investors continue to add gold to their portfolio. Those who cannot afford to actually purchase gold bars tend to speculate on the value of gold by buying and selling gold-USD CFDs, which can be done instantly online via global platforms like INFINOX. Although the Saudi Public Investment Fund doesn't use gold CFDs, millions of small-scale investors in SA and beyond do.
So, what next for the Saudi Public Wealth Fund? As we edge ever-closer to the post-oil era, expect the Fund to make bigger and bolder moves than ever before. Watch this space to see how things develop in the coming months and years.