In 2023, Saudi Arabia’s Public Investment Fund (PIF) emerged as a powerhouse in global sovereign wealth fund spending, contributing a staggering $31.5 billion, which constituted approximately a quarter of the total $123.8 billion spent by sovereign wealth funds worldwide, as revealed in a preliminary annual report by industry specialist Global SWF. The report, published on January 1, highlights the significant role played by PIF in the global financial landscape. The surge in global stock markets throughout the year contributed to a record-high of $11.2 trillion in assets managed by sovereign wealth funds globally. Despite the positive trends, the report also indicates that the overall spending by sovereign wealth funds in 2023 was 21% lower than the previous year, prompting observations of a potentially cautious approach among these institutions, despite ample available capital.
Furthermore, the report underlines the growing emphasis on sustainable investments, noting that total sovereign-controlled spending on the energy transition, encompassing initiatives from green hydrogen to lithium mining, reached an unprecedented $25.9 billion in 2023. Despite the decline in overall spending, this substantial investment in sustainable projects reflects a commitment among sovereign wealth funds to contribute to the global shift towards cleaner and more environmentally friendly technologies. Notably, Singapore’s GIC, a leading contributor to wealth fund spending for the past six years, experienced a 48% reduction in investments in 2023, even with a substantial $144 billion inflow from the country’s central bank. The Global SWF report also highlights the shifting dynamics in wealth fund dealmaking, with Gulf funds solidifying their dominance and accounting for nearly 40% of the investment value deployed by sovereign wealth funds, surpassing Canadian and Singaporean funds.