PIF's $532B growth masks reliance on state cash and loans

Saudi Arabia's Public Investment Fund swelled to $1.2 trillion in assets, but more than 60% of its $532 billion growth since 2021 came from government contributions — not investment gains.

"The fund's reliance on state injections and debt raises questions about its ability to generate independent returns," said Karen Young, a senior fellow at the Middle East Institute.

Of the $532 billion in asset growth, $340 billion came from the government, including large chunks of Aramco stock, while another $107 billion came from loans and bonds that require repayment. The fund wrote off $12.4 billion in unnamed capital projects in 2025 and $17 billion in 2024.

The sluggish organic growth challenges the kingdom's stated goal of reaching $2 trillion in assets by 2030, a cornerstone of Crown Prince Mohammed bin Salman's Vision 2030 plan to diversify the economy away from oil.

The fund's performance lags far behind global benchmarks. The S&P 500 gained 86% between 2022 and 2025, while many competing sovereign wealth funds posted far stronger returns. PIF's high-profile bets have largely underperformed: its $45 billion commitment to the SoftBank Vision Fund, a startup investment vehicle, has trailed the Nasdaq significantly.

Some of the fund's most painful losses came from domestic megaprojects. Neom, the planned futuristic city intended to house 9 million people, was mostly abandoned earlier this year, leaving 75 miles of trench where a rail line and a pair of 1,600-foot-tall skyscrapers were meant to run. The fund also scrapped LIV Golf this spring after pumping billions into the failed attempt to challenge the PGA Tour.

Write-offs pile up as PIF resets strategy

The $12.4 billion in write-offs for 2025 and $17 billion for 2024 reflect the scale of failed projects. Earlier this year, the fund announced a strategic reorientation, pulling back from many giant projects that proved unaffordable while shifting focus toward artificial intelligence and domestic tourism.

PIF reported $17 billion in profits for 2025 and holds more than $90 billion in cash, which it described as "significant firepower" for its investment strategy. Fund Governor Yasir Al-Rumayyan said in September that the fund remained on track for $2 trillion in assets by 2030, adding that "there's a good chance for us to be $3 trillion."

Government finances face added strain

The fund's struggles come as Saudi Arabia faces widening budget deficits and mounting fiscal pressures. The kingdom is expected to face large bills for defense spending and infrastructure projects that could help protect the country from future economic shocks. Young said PIF will likely need to focus on generating more returns and may need to sell or list publicly some of the companies in its portfolio.

Not all of PIF's bets have disappointed. Many of its Riyadh development projects are popular and expanding quickly, while investments in mining and banking have shown strong revenue growth. But the overall portfolio's dependence on government capital rather than organic investment returns raises questions about whether the fund can achieve its ambitious targets without continued state support.

This article is for informational purposes only and does not constitute investment advice.