The fintech year has just started

RIYADH: In 2016, Saudi Arabia announced the Vision 2030 plan to diversify the kingdom’s economy. It dared to change its identity as an oil-rich nation to a harbinger of new ideas that would shape the world.

Six years later, the kingdom has ventured into new realms of opportunity that the Arab world would not have dared to dream of even a decade ago, thanks to the sovereign wealth fund that controls $620 million worth of assets: the Public Investment Fund.

Recognized as one of the largest sovereign wealth funds in the world, PIF has led economic diversification in Saudi Arabia through strategic international and domestic investments.

Transforming the idea of ​​Saudi Arabia globally, the fund owns more than 50 companies and has created more than 500,000 direct and indirect jobs.

Strategic power

In May 2022, PIF launched Saudi Coffee Co., aiming to make Saudi coffee beans a global product.

A press release issued by PIF noted that the company plans to invest SR 1.2 billion ($320 million) over the next 10 years.

PIF also said the new firm will play a central role in the development of sustainable coffee production in the southern Jazan region, home to the world-famous Coffea Arabica.

In an exclusive interaction with Arab News on the sidelines of the Future Investment Initiative in Riyadh, Saudi Coffee Co. CEO Raja Alharbi said the firm will produce 2,500 tons of coffee within five years, up from 300 tons produced annually now.

In October, PIF also launched the Halal Products Development Co., aimed at turning the Kingdom into a global halal hub.

We have four relatively new sectors: entertainment, sport, tourism and culture… PIF invests in these sectors.

Faisal Al-IbrahimSaudi Minister of Economy and Planning

“HPDC aims to localize knowledge, technology and innovation to develop halal products, including foodstuffs, cosmetics and pharmaceutical products. The company also aims to promote investment and economic opportunities for the industry by introducing various services, including specialized consultancy, PIF said .

In the same month, to ensure its commitment to creating a sustainable future, PIF raised $3 billion through the issuance of green bonds.

According to a report by the Saudi Press Agency, the bond was issued in three tranches and was oversubscribed more than eight times, with orders exceeding $24 billion.

We want to reach $1 trillion by 2025. And we are now almost below $700 billion. So we need close to $400 billion to reach this size of assets.

Yasir Al-RumayyanPIF Governor

As Saudi Arabia continues to diversify its economy, the PIF is creating a healthy investment base for businesses to thrive and grow in the Kingdom.

Speaking at the Future Investment Initiative, Minister of Economy and Planning Faisal Al-Ibrahim said that the PIF played a crucial role in this period of economic transition in Saudi Arabia.

“PIF makes bold investments. We have four relatively new sectors: entertainment, sports, tourism and culture. These sectors did not exist significantly until seven years ago and PIF is investing in these seven sectors, he said.

The fund also provided adequate support to its entities as the world faced several problems last year due to COVID-19 and geopolitical tensions, resulting in supply chain disruptions.

Earlier in August, Faisal Sultan, managing director of global operations at Lucid, said PIF – which owns over 60 percent of the electric car maker – was very supportive as the firm faced a supply crisis that led to two cuts in production targets.

The ambition of 1 trillion dollars

In February 2022, PIF opened three new offices in London, New York and Hong Kong in line with its global expansion plans.

The expansion of these offices is part of the fund’s 2021-2025 strategy to grow its assets under management to $1.07 trillion by the end of 2025, while continuing to create new sectors, companies and jobs.

PIF Governor Yasir Al-Rumayyan said he had a detailed strategy to increase the fund’s assets between $2 trillion to $3 trillion by the end of this decade.

“We want to reach $1 trillion by 2025. And we are now almost less than $700 billion. So we need close to $400 billion to reach this size of assets,” Al-Rumayyan said during an interview given to the Thmanyah podcast.

He added: “We have a full plan from now to 2030 on how to reach a trillion and reach between $2 and $3 trillion, and His Highness the Crown Prince is determined to achieve that.”

In September, Bloomberg reported that PIF plans to hire 50 more employees for its New York office.

The Bloomberg report noted that PIF plans to recruit staff for several positions in various sectors, including investment research, legal and compliance, and hire a chief of staff for its New York office.

Earlier in November, PIF increased its holdings in Meta and Alphabet in the third quarter of 2022. At the end of the third quarter, PIF has about 3.26 million A shares in Facebook’s parent company Meta – up from 418,000 at the end of the first quarter. quarter and 2.94 million at the end of June.

PIF also significantly increased its stake in Google’s parent company Alphabet to 4.26 million class A shares at the end of the third quarter from 213,000.

To understand the need to protect the environment, PIF invests in many green projects. For example, in October the fund announced the launch of the Regional Voluntary Carbon Market Co. in partnership with Tadawul Group for SR500 million.

In addition, during the Future Investment Initiative conference this year, PIF auctioned off 1.4 million tonnes of carbon credits for the first time, widely touted as the largest carbon credit sale ever.

As PIF continues its journey to achieve sustainability by investing in renewable energy and hydrogen, along with planting millions of trees in the Kingdom, the future of Saudi Arabia is bright and more monumental initiatives can be seen from the fund in the future as well.