Saudi Arabia’s Public Investment Fund is exploring new ways to raise cash from its portfolio companies, sources said on November 10. The fund wants to grow investments without using its own capital. "This phase is underpinned by increasingly diversified financial returns," the fund noted in its latest strategy documents.
DUBAI, Nov 10 (Reuters) - Saudi Arabia's Public Investment Fund is in the early stages of exploring new fundraising options, three people with knowledge of the matter told Reuters, as part of a move by the wealth fund to grow investments without injecting more of its own capital.
One of the options the fund is exploring is securitizing cash streams from some portfolio companies, two of the sources said.
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PIF, one of the world's biggest sovereign wealth funds with over $900 billion in assets under management, will examine all opportunities to raise capital, whether by selling stakes in mature assets and raising funds for younger companies, another source said.
While the fund has a vast array of options, including trimming stakes in listed assets, selling bonds to international investors or raising debt from export credit agencies, a liquidity crunch across Saudi lenders and a lull in stock market listings could encourage widening the funding strategy, the source said.
PIF has spent almost a decade setting up companies spanning real estate, technology and a new airline as it drives economic development under the country's ambitious "Vision 2030" programme to cut reliance on oil. However, recent challenges compounded by the impact of the Iran war mean pressure is rising for more of its investments to generate returns.
PIF, when asked for comment, pointed Reuters to sections of its 2026-2030 strategy.
"This phase is underpinned by increasingly diversified financial returns, greater private sector and capital markets participation in Saudi Arabia," according to the strategy documents. They note that as the fund "progresses through this phase and a growing share of its investments mature, the financing of portfolio company growth is expected to evolve."
PIF declined to comment on plans for securitizations and talks with investors on stake sales, while the Saudi government did not respond to a request for comment.
STAKE SALES
It was not immediately clear which portfolio companies could pursue securitizations and how large any transaction would be.
The PIF has been exploring selling stakes in some companies, but valuation gaps in early conversations with investors and disagreements around ultimate control of the asset have emerged as an obstacle to potential investment, two of the sources said.
Whether PIF sells a stake depends largely on a company's sector and how strategic that is to the fund and Vision 2030, as well as the business's financial self-sufficiency, another source said.
A weak Gulf IPO market in 2026 has also limited another fundraising route as market conditions and a drop in valuations discouraged new debuts, three of the sources said.
The kingdom was relatively less affected by the Iran war than Gulf peers in the first half of 2026, but recent attacks by the Iran-aligned Houthis in Yemen have clouded the outlook. Real GDP is projected to contract by 3.6% this year as oil activity dropped, while key events including a flagship investment conference were cancelled.
Jefferies said last month that Saudi banks - instrumental in funding the economic turnaround by tapping debt markets to sustain rising demand for credit - delivered resilient third-quarter net income, but a higher loan-to-deposit ratio indicated "increasingly tight liquidity conditions."
NEW STRATEGY
Even before the war, the kingdom had struggled to attract foreign investment vital to funding its shift away from oil, and some key real estate projects were omitted or largely scaled back under the PIF's 2026-2030 strategy released in April.
At the end of last year, the fund reported an annualised total shareholder return of 5.8% since 2017, down from 7.2% at the end of 2024. It says its new strategy is focused on "value realization," implying bringing in more private investors, with some initial signs of progress.
Reuters has also reported that PIF is considering selling a minority stake in UK soccer team Newcastle United and that PIF-owned developer ROSHN is seeking investors for a key project to free up capital.
Yet, many PIF deals involve other state-linked entities, including firms in which the fund has stakes.
The Humain deal does not imply an immediate liquidity problem for the PIF, "but the scale of its domestic portfolio means continued expansion cannot depend indefinitely on new PIF equity," research firm Global SWF said in a report.
The new strategy requires more portfolio companies to generate cash and support their own debt, it said.