Saudi Arabia’s Sovereign Wealth Fund Faces Financial Difficulties Amid Purchase of EA — Media

The new owners of Electronic Arts will almost certainly require the company to tighten its belt.

Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF) — the kingdom’s primary vehicle for diversifying an oil-dependent economy — is said to be running low on liquid capital for new investments, according to people familiar with the fund’s operations who spoke to The New York Times.

In recent years the fund has deployed capital across global markets, including the video-game industry. It has taken stakes in publishers such as Take-Two Interactive and Nintendo, and most recently joined Silver Lake and Affinity Partners in a roughly $55 billion purchase of Electronic Arts.

However, according to eleven NYT sources, the PIF has been forced to pause fresh investments amid financial pressure stemming from several large-scale projects. Those projects include the ambitious futuristic city Neom — envisioned with robotic staff, a ski resort, and beaches surfaced with crushed marble — as well as a coffeehouse chain, a cruise line built around a single ship, and an electric-vehicle startup.

In response, the fund is restructuring: the crown prince has already dismissed Neom’s chief executive, and the PIF plans to shift focus toward more conventional assets such as publicly traded equities.

Source: iXBT.games