PIF has a new strategy: It wants the business community to invest

Saudi’s Public Investment Fund (PIF) has a new five-year strategy: It wants the private-sector to co-invest with it — and it’s culling its white elephants, including, it seems, high-profile sports franchises at home and abroad. The move suggests the era of the sovereign wealth fund as the sole underwriter of Saudi Arabia’s economic transformation is over.

What happened: The fund’s board of directors — chaired by MbS — signed off on the2026-2030 strategy this week, pivoting from a build-at-all-costs stance to one that demands private-sector co-investment, trims spending by 15%, and recalibrates which gigaprojects are getting built.

The potential game-changer is a SAR 70 bn (c. USD 18.7 bn) “private-sector support facility” that reads a lot like a co-investment fund. It’s designed to pull private investors into PIF-backed ventures, with PIF boss Yasir Al-Rumayyan framing it as an opportunity: “It offers our partners more opportunities to invest in high-quality assets and ecosystems, alongside PIF.”

The official framing is pure Big Four: The strategy “marks a natural evolution as PIF moves from a period of rapid growth and acceleration to a new phase of sustained value creation,” the fund said in a statement, with “a strengthened focus on maximizing impact, raising the efficiency of investments, and applying the highest standards of governance, transparency and institutional excellence.”

Riyadh has used the war in the Gulf as the impetus for a long-overdue recalibration. It’s what the PR types call “taking out the trash” — putting out news you’d rather have pass quietly when folks are paying attention to something else.

We’ve been tracking this for a while now. Trojena — Neom’s mountain ski resort once in line to host the 2029 Asian Winter Games — has scrapped contract after contract in recent weeks as the fund redirects resources.

Al-Rumayyan telegraphed the shift last month: “We wanted to do most of these investments by ourselves and it’s all equity. Now, we’re looking into it in a greater way: How to invite people to come and work with us.” That’s about as close as a Saudi official gets to saying the cheque book has limits.

Officials are prioritizing three types of projects: Projects that carry hard international commitments, like the 2034 FIFA World Cup infrastructure and the 100,000+ hotel rooms the tourism ecosystem demands. Projects that have direct impact on citizens, like the massive housing buildout that backs a target of 705 home ownership. And a longer-term focus on the industries of tomorrow.

Even in long-term priority sectors, the approach is getting more pragmatic. PIF’s tech investment vehicle Alat has pivoted away from semiconductor manufacturing toward data center buildout — a tacit acknowledgment that a chip fab built from scratch was always a stretch, while housing the AI infrastructure the world needs right now is not.

Gigaprojects are going to be built in phases. Al-Rumayyan has recently used language first pushed a couple of years back by Finance Minister Mohammed Al-Jadaan, who suggested that the buildout should be seen as “ modular.” The PIF governor told Reuters that The Line doesn’t need to be completed by 2030 — while Neom’s industrial city, Oxagon, is being brought to the front of the queue.

What, exactly, are PIF’s new priorities?

The PIF’s new strategy will divide its investments into three portfolios — one for strategic investments, one for managing assets, and one for global markets investments.

The “vision” portfolio cuts across six sectors, down from 13 in the old plan, including tourism, travel, and entertainment; urban development; advanced manufacturing; industrials and logistics; clean energy; water and renewables; and Neom.

The strategic portfolio bucket includes existing national champions — think: telecoms powerhouse STC, ACWA Power, and Maaden — while the financial portfolio are return-seeking global investments.

Backing away from sports?

The PIF’s sports spending spree is getting a hard look after years of over-investment. PIF signed a binding agreement yesterday that will see Prince Alwaleed bin Talal’s Kingdom Holding Company buy 70% of Al Hilal football club at an enterprise value of SAR 1.4 bn (USD 370 mn). PIF Deputy Governor Yazeed Al-Humied said the move “aligns with PIF’s strategy to maximize returns and redeploy capital within the domestic economy.” PIF still holds Al Nassr, Al Ahli, and Al Ittihad.

And then there’s LIV Golf. The New York Times, Financial Times, and Wall Street Journal all reported in recent days that PIF is about to cut funding for the upstart league. Reuters later reported the opposite — that LIV’s 2026 season remains on track with PIF’s full backing. We’re reading the coffee grinds against the broader strategy — a fund that’s cutting capex by 15%, looking for private investors to commit capital, and selling football clubs is not one that’s going to keep bankrolling a golf league that exists primarily as a geopolitical vanity project.

Three questions you need to be asking

PIF’s move is unquestionably the right one at the right time. Here’s what we’re keeping an eye on next:

#1- Are international actors really willing to commit their own balance sheets to Saudi? It’s one thing to take MbS’ money on a construction or consulting contract — and something else entirely to be asked to commit your own money to an investment in the Kingdom. The SAR 70 bn co-investment fund is designed to bring in risk-sharing partners, not just fee-seeking contractors repackaged as investors.

#2- Will the domestic private sector come in off the sidelines? PIF’s domestic co-investment push assumes homegrown businesses will put their own money in alongside the fund. After the events of 2017-2019, many big Saudi family-owned businesses stepped up their investments outside the country.

#3- Will the co-investment strategy make it even harder for the Saudi private-sector to raise debt for projects not linked to Vision 2030? Giga-projects have already absorbed gobs of domestic bank liquidity. Saudi firms coming into PIF-backed ventures will need to raise debt from the same pool of bank credit that the non-gigaproject private sector depends on to sell cars, make food, and tend to their own businesses.

BACKGROUND- Under the 2021 strategy, PIF invested more than USD 199 bn in new domestic projects and grew AUM to more than USD 900 bn at the end of last year from USD 150 bn in 2015 a decade ago. White elephants aside, it created entire sectors from a standing start: Neom, the Red Sea Project, Qiddiya, Roshn, and Humain. With oil below USD 90, we see the recalibration as a clear sign that the royal treasury can’t fund both the fiscal deficit and another round of capital-hungry giga-project buildouts.