Saudi Arabia’s state-owned Public Investment Fund (PIF) was the most active global sovereign investor last year, deploying $31.6 billion in 49 deals, a report by Global SWF said.
Three of the largest deals of the year were all by PIF, the report noted.
PIF’s spending spree last year included US gaming firm Scopely ($4.9 billion in April), Standard Chartered’s leasing division ($3.6 billion in August), and Saudi chemical maker SABIC’s Hadeed steel unit ($3.3 billion in September).
The surge in investments by PIF comes even as Singaporean and Canadian sovereign funds tightened their purse strings.
Dubbed the “Oil Five”, five Middle Eastern funds–Saudi’s PIF, the UAE’s Abu Dhabi Investment Authority, Mubadala, and ADQ, and Qatar Investment Authority–continued to gain market share and drive SWF activity globally, the report said.
Singapore’s GIC, which had topped the Global SWF rankings for the past five years, slipped to the second spot as it pulled back its investment activity by a third in volume terms and by almost half in value terms, despite having pocketed one of its largest inflows ever from the Monetary Authority of Singapore.
Three Canadian funds – Canada Pension Plan (CPP), British Columbia Investment Management Corp. (BCI), Ontario Teachers’ Pension Plan (OTPP) – and the other Singaporean investor, Temasek, completed the top 10.
Last year, global sovereign funds invested $124.7 billion, down 20% from the previous year, across 324 deals, with an average ticket size of $385 million.
The regional preferences of the top investors are changing and there seems to be a renewed interest in emerging markets, the report noted.
Half of the sovereign funds invested more in emerging markets than in any other region, with strong interest in China, Indonesia, Brazil, and especially, India, which has become the second most popular destination after the US.
Most sovereign investors saw their US equities portfolio expand, along with a surge in appetite for Indian stocks, while interest waned in European and Chinese markets.
Globally, sovereign funds invested over a quarter of their resources into real estate, marking the highest interest in this sector since 2014, Global SWF said.
In Indian real estate, GIC was among the leading investors as it signed a $ 1.4 billion joint venture with Brookfield India REIT to build two large commercial office assets in Mumbai and Gurugram, and a $141 million purchase of an information technology-special economic zone in Hyderabad.
Financial and infrastructure sectors were popular among the funds too, with 19% and 18% of the deals, respectively.
Investment in renewable resources remained robust, with India becoming a focal point. Key investments included APG Asset Management and BCI in Mahindra Susten, CPP in ReNew Power, QIA in Adani Green Energy, and both ADIA and GIC in Greenko.