Saudi Public Investment Fund reports $16 billion in 2022 losses—but is sport to blame?

Investing

As it makes headlines for its startup golf tour merging with the PGA and its huge international investment spree, Saudi Arabia’s controversial Public Investment Fund reported $11 billion (AUD$16b) in losses in 2022, according to Bloomberg—a year in which the Saudi fund launched a new sports investing venture and stock markets slipped.
Huge money has been poured into the breakaway LIV Golf league. Image: Getty
Key Takeaways
  • Last year’s numbers are a far cry from 2021, when PIF reported a profit of $19 billion.
  • PIF did not report what return it made on its accounts in 2022, but global markets saw significant declines, with the S&P 500 losing 19.4%—the worst year since 2008.
  • In 2022, PIF launched the Sports Investment Company as a spinoff of its sports properties that will invest in sports domestically and internationally.
  • PIF’s assets ended the year at about $778 billion, according to Bloomberg.

The Sports Investment Company’s properties include the LIV Golf tour, which used the promise of massive winnings to lure major golfers toward its events, setting off a legal conflict with the PGA Tour until the two entities announced plans to merge last month. During a congressional hearing Tuesday, PGA Tour officials acknowledged the merger involved an investment from PIF “north of $1 billion.”

Key Background

PIF is the national sovereign wealth fund of Saudi Arabia. Since 2016, it has invested both domestically and internationally with money gained mostly from tapping into the country’s oil deposits. That includes launching 79 companies, including Riyadh Air, and investing in a number of international companies, including $3.3 billion worth of Activision Blizzard shares—which jumped in price Tuesday morning after a legal hurdle was cleared to merge with Microsoft—and $2.3 billion in Uber shares. In addition to its moves in golf, the fund has used its wealth to gain a foothold in the international soccer world. That includes a £305 million—$414.8 million—takeover of English soccer club Newcastle United and a deal to bring Portuguese superstar Christiano Ronaldo to Saudi club Al Nassr, which is backed by a subsidiary of PIF.

Related

Tangent

LIV Golf’s blockbuster merger with the PGA was put under the spotlight in Washington, D.C., Tuesday as lawmakers grilled PGA officials during a congressional hearing about the deal that made it happen. Sen. Richard Blumenthal (D-Conn.) told a group of PGA executives the deal gives the Saudi government “financial dominance” because they “control the purse strings.” Much of the controversy around the merger stems from accusations Saudi Arabia is using sports to distract from record human rights abuses.

LIV Golf CEO Greg Norman has faced repeated questions about the killing of American journalist Jamal Khashoggi by Saudi officials. Additionally, a coalition of families that lost loved ones in the 9/11 attacks have released a statement condemning the merger, calling it “sportswashing” to distract from the fact that “Saudi operatives played a role in the 9/11 terrorist attacks” (most of the 9/11 hijackers were from Saudi Arabia, but the country’s government has long denied any ties to the attackers).

This article was first published on forbes.com and all figures are in USD.

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