Saudi Investment Fund Divests Major U.S. Stocks Amid Portfolio Decline in Q3
Saudi Arabia’s Public Investment Fund (PIF) has taken significant steps to reduce its exposure to U.S. stocks in the third quarter of 2023. The fund’s total U.S. portfolio has decreased to $19.4 billion, representing an 18% decline compared to the previous quarter. This divestment aligns with the PIF’s strategy of streamlining its American holdings.
Major Divestments by the PIF
As part of this strategic shift, the PIF has sold off several significant stakes in key U.S. companies:
- Pinterest (PINS)
- Linde Plc (LIN)
- Prologis Inc. (PLD)
- Air Products and Chemicals Inc. (APD)
Furthermore, the fund divested from:
- Cummins Inc. (CMI)
- BeOne Medicines Inc. (ONC)
- Avery Dennison Corp. (AVY)
While the PIF reduced its stake in Lucid Group (LCID), it retained this investment at a smaller size. Key holdings such as Uber Technologies (UBER) and Electronic Arts (EA) remained intact in the portfolio.
Impact of Sales on Portfolio Value
The recent trades have led to notable shifts in the overall value of the portfolio. For instance, the divestment of approximately one million shares in Cummins reduced the stake by around $359 million. Similarly, the selling of over 400,000 shares in Linde resulted in a stake reduction of about $205 million. The exits from Air Products, BeOne Medicines, and Avery Dennison decreased the combined value of these positions by around $171 million.
Current Portfolio Overview
At the close of the third quarter, the PIF’s largest U.S. holding was Uber, valued at approximately $7.1 billion, followed by Electronic Arts at about $5 billion. Lucid Group held a valuation of roughly $4.2 billion despite the recent trimming. Take-Two Interactive Software (TTWO) was next, valued at about $2.9 billion.
The top five stocks now represent nearly the entire U.S. equity portfolio of the PIF, indicating a move towards a more concentrated investment strategy.
Future Investment Trends
Looking ahead, the PIF has signaled its intention to focus more on domestic projects. The fund plans to allocate $57 billion in 2024 for initiatives in Saudi Arabia, with an anticipated investment of $70 billion post-2025. This strategy resonates with the objectives outlined in Saudi Arabia’s Vision 2030, aimed at fostering sustainable economic growth.
The recent portfolio adjustments occur ahead of a scheduled meeting between Crown Prince Mohammed bin Salman and President Donald Trump, which is set to address topics such as security and investments. The PIF also plans to disclose its investment strategies for 2026 through 2030 early next year.
The third-quarter report illustrates the PIF’s clear movement towards local assets while scaling back its U.S. stock involvement.
