ANALYSIS: Global Influence of Saudi Investors Strengthens

The Kingdom of Saudi Arabia is positioning itself as an integral part of global capital markets, making strong outward investments and new strategic relationships abroad. Saudi Arabia’s largest sovereign wealth fund, the Public Investment Fund (PIF), is the engine driving the country toward its economic goals, which are captured in the Vision 2030 plan. Through recent acquisitions and disclosures, we’re starting to see the influence Saudi Arabia may soon wield in the global investment management industry.

The Public Investment Fund is leading the charge to invest abroad, aiming for half of its holdings to be in international assets by the 2030 benchmark. At the start of April, Saudi Arabia’s Savvy Gaming Group, a wholly-owned subsidiary of PIF, announced a $4.9 billion cash acquisition of California-based Scopely Inc. The deal fits squarely within the broader vision to diversify the Saudi economy, especially within the tech sector. With a deal value that’s larger than the cumulative value of 2022’s full year of Saudi Arabia’s outward private equity investments, including venture capital deals, it’s a strong indication that Saudi investors will provide a steady stream of capital beyond their borders.

Beyond tech, the 2030 plan has been a boon for entrepreneurial businesses in the healthcare, infrastructure, and consumer services sectors. The Scopely deal is the third largest private equity investment in a foreign company by a Saudi-based investor, just ahead of PIF’s 2016 $3.5 billion investment in Uber Technologies.

In addition to seeking financial returns from an increasingly-diverse range of investments, Saudi Arabian investors appear to be strengthening their influence abroad with strategic relationships with foreign political and business leaders. Saudi investment company Sanabil Investments recently disclosed ties to influential US venture and growth equity firms including Andreessen Horowitz, KKR, and Apollo Global Management. And, in a controversial move likely intended to increase its global influence, PIF invested $2 billion in Affinity Partners, Jared Kushner’s private equity firm.

Given the push to increase holdings among forward-looking industries, it’s no surprise that venture capital is an outsized component of the private equity investments flowing from Saudi Arabia. In contrast to cross-border transactions in other nations, Saudi investors aren’t pumping the brakes on outward investments.

Last year, 70% of the private equity deals between Saudi-based investors and foreign targets or sellers involved venture capital, compared to just 35% of all private equity deals in 2022. This ratio tracks with the country’s emphasis on entrepreneurship.

Driven by the Vision 2030 Plan and led by the country’s largest sovereign wealth fund, Saudi investors are coming into the limelight. Whether recent strides will solidify the kingdom’s global leadership position in the financial industry is something that time will tell. Regardless, the Saudi economy is becoming a viable source of capital for foreign companies—and new rules are potentially opening up opportunities for foreigners to invest within its increasingly diverse economy.

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