Saudi Arabia’s Public Investment Fund (PIF) emerged as the world’s most active sovereign investor last year, boosting its deal activity even as most global peers, including GIC Pte and Temasek Holdings Pte, slashed spending.
PIF, as the Saudi Arabian fund is known, deployed US$31.6 billion last year, research consultancy Global SWF said.
That was higher than the US$20.7 billion it invested the previous year, an increase that contrasts with a wider trend, as globally state-owned investors deployed US$124.7 billion, about one-fifth less than a year earlier.
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The declines were led by GIC, which cut the amount of capital deployed by 46 percent to US$19.9 billion and lost its spot as the world’s most active sovereign wealth fund for the first time in six years.
TemasekHoldings also reduced new investments by 53 percent to US$6.3 billion against a backdrop of volatile markets, which led the two Singapore-based investors to report worsening returns.
Much of GIC’s decline related to investments across developed markets, Global SWF said.
Singapore’s state investors continued to be active in emerging markets such as India, with deals including GIC’s US$1.4 billion joint venture with Brookfield India REIT and Temasek’s increased stake in Manipal Health Enterprises Pvt Ltd.
“Singaporean investors are being more cautious and we’ve seen that reflected in the numbers,” Global SWF said. “Gulf sovereign wealth funds have increased their domination of the global transaction activity, to the detriment of Singaporean and Canadian funds, and now represent almost 40 percent of all investment value deployed by sovereign investors.”
Overall, sovereign wealth funds controlled by the hydrocarbon-rich governments of Abu Dhabi, Saudi Arabia and Qatar took five spots on a list of the top 10 most active funds last year.
That trend could continue.
The governments of Bahrain, Kuwait, Oman, Saudi Arabia, Qatar and the United Arab Emirates are set to control about US$4.4 trillion in gross foreign assets by the end of this year, two-thirds of which is likely to be managed by sovereign wealth funds, a report issued by the Institute of International Finance last month said.
The PIF was behind the largest sovereign-backed deals last year, either directly or through its subsidiaries. These include its nearly US$5 billion acquisition of US gaming company Scopley Inc through Savvy Games Group and a US$3.6 billion acquisition of Standard Chartered PLC’s aviation leasing business through Avilease.
In September, the PIF also acquired the steel business of Sabic Basic Industries Corp in a US$3.3 billion deal that helped push the Saudi Arabian fund’s domestic investment to about 42 percent of total deployment last year.
“The variety of deals shows the unparalleled bandwidth and reach of PIF and its subsidiaries,” Global SWF said.
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