Saudi Arabia’s nearly $1 trillion sovereign wealth fund is facing several challenges, both in the performance of its portfolio and the execution of its projects.
On the first, a former IMF mission chief to the kingdom argued the Public Investment Fund should review its investment plans after a “less than stellar” recent performance, while on the latter, a mountaintop ski resort is facing myriad issues.
The criticism from Tim Callen, who was also chief of the fund’s GCC division from 2012 to 2021, points to a particular worry: PIF’s low investment returns and the declining value of its gigaprojects, despite continuing to spend billions of dollars on them. Callen wrote for the Arab Gulf States Institute that the fund should “assess the economic and financial viability of the investments being made.”
Callen’s views highlight a central challenge for PIF: Its vast domestic spending will suck up huge amounts of capital for years to come. Whether those projects will pay off will likely take even longer to become clear.
Those issues coalesce around NEOM: Semafor reported last month that the futuristic city was planning to lay off or relocate hundreds of staff in order to trim costs and boost oversight. It’s also facing difficulties delivering a ski resort set to host the 2029 Asian Winter Games, Bloomberg reported.