Saudi's PIF reports huge $11 billion losses amid massive football splurge

Saudi Arabia’s Public Investment Fund (PIF) suffered massive $11 billion in losses in investments in 2022 after recording impressive $19 billion profits the year earlier.

Analysts have put it down to the ebb and flow of the global stock market as bond and stock prices declined over the past year, with the S&P 500 dropping just under 20 percent in 2022.

Despite the losses, the fund has grown considerably, expanding its assets to $778 billion from $676 billion in 2022 according to Bloomberg. The growth is in line with the the Saudi goal of ensuring the fund attains $2 trillion in assets by 2030 and part of its diversification Vision 2030 plan.

Much of this expansion has been in sports and has prompted the recent launching of a new Sports Investment Company in 2023 that will focus on new sports acquisitions, according to The Financial Times.

The fund recently sealed a deal to merge its own LIV golf tournament with the PGA last month after luring major golfers Tiger Woods and Rory McIlroy into ownership stakes.

In a US Senate hearing on the deal last Tuesday, PGA board member Jimmy Dunne said that the deal, and follow-on negotiations, were the best way to preserve the sports independence fearing a takeover of the sport by the fund.

The discussions around golf follow a similar trend in diversifying its sports holdings, such as in tennis, where the fund has recently been negotiating with the ATP Tour over possible investments into new projects and ventures.

The fund also set up a Savvy Games Group to spearhead its initiative into the gaming industry, and follows from major investments into a variety of gaming giants such as Nintendo, Activision Blizzard and Ubisoft.

However, it is football which has garnered the most public attention after the acquisition of English Premier League side Newcastle United in 2021, as well as luring in several world-class football players to the kingdom's domestic league this year, including Cristiano Ronaldo and Karim Benzema.

Investments into football are unlikely to stop, with Bloomberg reporting that the fund is considering the purchase of another club from a top-flight European league. The consideration follows a chance in UEFA rules that prohibited clubs with the same owners from competing in its competitions.

The Public Investment Fund, chaired by Crown Prince Mohammed bin Salman, is a central part of the country's Vision 2030 initiative to diversify its economy away from its reliance on the energy sector.