Saudi PIF weighs new financing to fund portfolio growth

Saudi Arabia’s Public Investment Fund is considering securitisations, sales of stakes in portfolio companies and external borrowing to finance future growth and attract private capital. The proposals would reduce its reliance on direct equity injections and generate returns from existing investments.

The discussions are at an early stage. The PIF has not identified the companies involved or disclosed potential transaction sizes. One option is to securitise cash flows from portfolio companies, allowing the fund to borrow against future income. It is also examining sales of holdings in mature businesses and external financing for younger investments.

The proposals form part of the PIF’s 2026–2030 strategy, which gives greater weight to returns from existing investments and private-sector participation in Saudi Arabia’s economic transformation. The fund manages more than $900 billion in assets and has invested in real estate, technology, infrastructure and other sectors through the kingdom’s Vision 2030 programme.

The PIF has faced valuation disagreements and concerns about control of strategic assets while seeking outside investors. A slowdown in Gulf initial public offerings, tighter liquidity at Saudi banks and economic disruption linked to the Iran conflict have added pressure to fundraising conditions.

The PIF’s annualised shareholder return since 2017 fell to 5.8% at the end of 2025, from 7.2% a year earlier. The fund is placing greater focus on generating cash from existing holdings and raising financing outside its direct equity budget.

The PIF and its portfolio companies have completed transactions aimed at bringing in additional capital. Kingdom Holding acquired a 70% stake in Saudi football club Al Hilal. The PIF is considering selling a minority stake in Newcastle United. It also completed the sale of a 49% interest in artificial-intelligence company Humain to Saudi Aramco, which plans to invest $2.6 billion in the company in 2026.

Research firm Global SWF estimates that the size of the PIF’s domestic portfolio means its expansion cannot rely indefinitely on new contributions from the Saudi government. Under the planned financing model, portfolio companies would generate more cash and arrange financing to support their growth.