Saudi Wealth Fund Delivered 25% Return Last Year on Global Stock Rally

Archana Narayanan and Matthew Martin, Bloomberg News

A woman displays 500 denomination Saudi Arabian riyal (SAR) banknotes, in this arranged photograph in Riyadh, Saudi Arabia, on Wednesday, July 29, 2020. Facing a twin crisis from the coronavirus pandemic and oil market turmoil, the government has taken unprecedented measures to steady its finances, including tripling value-added tax, increasing import fees, and canceling some benefits for government workers. Photographer: Maya Anwar/Bloomberg , Bloomberg

(Bloomberg) -- Saudi Arabia’s sovereign wealth fund said it delivered a shareholder return of 25% last year as global stocks rallied in the wake of the coronavirus pandemic, in one of the first insights into the finances of one of the world’s biggest state investors.

The Public Investment Fund’s returns more than doubled from an annual average of 12% between 2017 and 2020, according to a prospectus for its debt green bond sale that kicked off Tuesday. Last year’s return for PIF shareholders is roughly in line with that of investors in the S&P 500 Index, which was up 27% over the same period.

The fund’s profit attributable to its owner fell to 81.8 billion riyals ($21.75 billion) last year from 212.7 billion a year earlier due to discontinued operations, it said. Revenue was 228.2 billion riyals, up from 179 billion riyals a year earlier. In 2020, the fund made a one-off gain from the sale of its stake in chemicals maker Sabic for about $70 billion.

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The PIF, as the $620 billion fund is known, is in the midst of a global investment spree after it was transformed from a domestically-focused holding company into a sovereign fund in 2016. The fund manages a roughly $40 billion portfolio of US equities and has backed some of the world’s largest investors, including a $45 billion investment in SoftBank’s Vision Fund and a $20 billion deal into a US infrastructure fund managed by Blackstone Inc.

The bond prospectus offers a rare glimpse into the finances of a Middle East sovereign fund. Most of the region’s oil-rich states, which control trillions of dollars, don’t disclose much information on their investments or returns.