Saudi Arabia's sovereign wealth fund (PIF), which aims to become the world's largest among sovereign wealth funds, has posted weak results after a string of investment failures. Its goal of reaching $2 trillion (about 3,100 trillion won) in asset by 2030 has also hit a red light.
According to PIF's annual report released on the 30th of last month (local time), PIF's asset has grown to $1.2 trillion (about 1,860 trillion won) over the past five years. But of the $532 billion (about 825 trillion won) in asset added since 2021, more than 60%, or $340 billion (about 527 trillion won), was covered by government capital injections. Another roughly 20%, or $107 billion (about 166 trillion won), was raised through loans and bond issuance. Asset growth from its own investment performance was extremely limited.
The Wall Street Journal (WSJ) said, "Asset increases from its own investment performance were limited," and assessed that unrealistically designed and high-expense megaprojects, sports investments such as LIV Golf, and technology bets that have struggled in recent years have held it back.
PIF also took a big hit on the Neom project, a core initiative of the national development strategy "Vision 2030." Saudi Arabia poured massive funds into building a futuristic city for a population of 9 million, but halted most construction early this year. It is now known that only a roughly 75-mile (about 121 km) trench remains at the site, where a railway and two supertall buildings 1,600 feet (about 488 m) high were to rise.
The LIV Golf investment is also cited as a representative failure. PIF poured billions of dollars to create a new league to rival the PGA Tour, but it failed to deliver as hoped and effectively shelved related plans this spring. PIF also decided to halt funding for LIV Golf at the end of this season.
Large losses continued in other projects. In its financial statements that day, PIF said it recorded $12.4 billion (about 19 trillion won) in impairments (amortization) related to an unnamed capital project investment in 2025. Impairments in 2024 also reached $17 billion (about 26 trillion won).
Compared with the surge in global stock markets in recent years, the performance is even weaker. The S&P 500, the benchmark index of the New York Stock Exchange, rose 86% from 2022 to 2025. The SoftBank Vision Fund, in which PIF invested $4.5 billion (about 7 0 trillion won), also lagged far behind the Nasdaq's gains due to weak investments in tech startups.
PIF's weak performance is expected to be an obstacle to achieving its goal of expanding asset to $2 trillion by 2030. According to the WSJ, Saudi Arabia had already been running larger fiscal deficits and facing setbacks in major development projects even before the war with Iran. On top of that, not only will defense spending rise, but massive resources are expected to be needed to build infrastructure such as pipelines and railways to prepare for similar attacks in the future.
In response, PIF is also revising its investment strategy. Early this year, PIF said it would scale back large projects with weak profitability that are hard to sustain and instead focus on high-growth areas such as artificial intelligence (AI) and the domestic tourism industry.
Karen Young, a senior fellow at the Middle East Institute, a U.S. think tank, said, "The government will face heavy spending pressure on defense and infrastructure," adding, "PIF must focus more on generating investment revenue going forward, and it needs to sell or pursue initial public offerings (IPO) of some corporations in its portfolio."