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On a morning where the conversation on Saudi in the foreign press is predominantly focused on Aramco’s earnings, PIF’s portfolio mix got some long-form commentary from Reuters. The newswire notes that the Saudi Sector Development — PIF’s largest and fastest growing segment — holds about 100 local firms valued at USD 251 bn as of last December, or about a third of PIF’s AUM. The segment “is halfway between a startup incubator and a private equity portfolio,” Reuters says, with the division housing familiar names such as Riyadh Air, SURJ Sports, and Savvy Games — each of which grabbed plenty of limelight at the recently-concluded FII forum.
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PIF’s wager: “Assessing the current financial health of these entities is complicated by their youth, and limited disclosure,” Reuters explained, adding that at least a few — Savvy Games got special mention — appear to be taking off. Nevertheless, the PIF’s job is complicated by a double mandate to increase jobs and boost local spending. Moreover, and despite the considerable resources available to the state budget and PIF, there is a limit to how much capital can be invested in these homegrown startups before they are expected to become profitable.
