Saudi Arabia’s Public Investment Fund (PIF) is recalibrating its capital deployment as it shifts from large-scale project launches to a more phased, returns-driven investment strategy, according to Bain & Company partner Gregory Garnier.
Speaking to Arabian Business on the sidelines of the Future Investment Initiative (FII) in Riyadh, Garnier said the fund’s next stage would focus on prioritisation and capital discipline after years of rapid expansion across the kingdom’s giga-projects.
“What is changing a bit, which is no secret, is the recalibration of this capital deployment,” he said. “Like any startups, those are all big startups. They also face learning and reality.”
He described an ongoing process within PIF and its subsidiaries to sequence projects based on performance and market capacity.
“The process [is] ongoing to have a more, let’s say, staged approach to those giga projects, where basically, instead of launching everything at once, you measure first level of success, and then you continue if success is there,” he said. “When you deploy capital too fast, you create more risk to damage the returns.”
The remarks come as Saudi Arabia’s Vision 2030 transformation enters a new phase marked by tighter liquidity and greater private sector participation. According to Moody’s Investors Service, credit demand driven by Vision 2030 projects and mortgages has been rising by 12-14 per cent annually, while deposit growth has lagged behind, forcing banks and state-linked firms to rely more on market and foreign funding.
The shift underscores the kingdom’s challenge of balancing strong growth with financial stability. The Saudi Central Bank this year introduced a 100-basis-point counter-cyclical capital buffer, effective 2026, to moderate loan growth and bolster bank resilience.
Earlier this week, Saudi Investment Minister Khalid Al-Falih told delegates at FII that the government is deliberately stepping back to enable the private sector to take the lead in the next phase of investment.
“We are scaling back public spending and letting the private sector lead the way,” the minister said, noting that non-oil revenue now makes up more than half of government income. “Our unemployment has been halved, our women participation in the workforce has doubled.”
He added that Saudi Arabia’s competitive advantage lies in a long-term vision that investors can trust.
“Our competitive edge is multi-faceted but most of it has to do with the Vision,” Al-Falih said. “People can predict where the kingdom is going to be in 2030 and 2040. Our north star is clear.”
Garnier said PIF’s renewed focus involves scaling back its role in non-strategic sectors, particularly real estate, to make room for private capital.
“For sure, the private sector is important. They play their role, especially in real estate,” he said. “I think there was probably too much crowding of the PIF real estate project. Those are projects that the private sector can do and should do.”
He added that this adjustment allows PIF to redirect capital to areas that require sovereign involvement, such as emerging industries and strategic infrastructure.
“This allows PIF to save a bit of capital deployment… reused to something where really only PIF can invest,” Garnier said.
He said the recalibration was a “natural evolution” for a fund of PIF’s scale as it seeks to maintain its dual mandate of financial returns and national diversification.
“The vision is still the same, and the mandate is still the same,” he said. “It’s about optimising capital, prioritising where Saudi has the advantage, and ensuring returns while continuing to diversify the economy.”
According to Moody’s, PIF’s total debt has risen to about SAR 154 billion ($41 billion) since 2020, while its investment commitments between 2025 and 2030 are projected to approach SAR 1 trillion ($267 billion).
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