Saudi Arabia’s Investment Fund “Unable to Allocate” to New Deals

• Saudi Arabia’s investment fund signals a pause on new deployments.
• Major PIF projects face financial strain and rising cost pressures.
• Saudi PIF maintains its gaming push despite wider cutbacks.

Saudi Arabia's Public Investment Fund (PIF) is reportedly halting new acquisitions after years of aggressive investing in technology, entertainment, infrastructure, and global gaming. The fund has reportedly informed its partners that it will be "unable to allocate" substantial new funds in the immediate future. This is a rare instance of caution from one of the most aggressive sovereign investors in the world.

The change comes as pressure mounts on several large-scale projects that have experienced "financial distress," such as the Neom mega-city, which has battled unrealistic goal planning and development delays. Apart from that, much of its over $1 trillion in assets is trapped in illiquid or difficult-to-sell projects, thus hampering the fund's capacity to use fresh capital.

According to PIF spokesperson Marwan Bakrali, the fund holds approximately $60 billion in cash and other similar assets. However, experts claim it could not be sufficient to support another wave of risky wagers.

Is PIF Planning Something Else?

The liquidity crisis coincides with broader financial pressures. PIF has already written down $8 billion in megaprojects, including Neom, and has mandated spending cuts of 20-60% across over 100 portfolio businesses. 

The fund is reducing its stake in global equities while deploying more resources to domestic projects.  This change comes as PIF lifts its 2030 asset-under-management target to $2.67 trillion. With cash reserves dwindling and costs growing, it's questionable whether PIF can keep up its global expansion at the same rate.

Nevertheless, PIF isn't giving up on gaming despite the downturn. It continues to play a significant role in the $55 billion acquisition of EA with Silver Lake and Affinity Partners, which is scheduled to close in Q1, FY 2027 of the company. PIF already owns Scopely through Savvy Games Group and has significant investments in Take-Two, Nintendo, Capcom, Nexon, Embracer, and several esports businesses.