DUBAI, Aug 16 (Reuters) – Saudi Arabia’s Public Investment Fund reported 9.6% growth in its U.S. equity holdings in the second quarter to $38.9 billion but its investment in EV-maker Lucid “undermined” its otherwise successful holdings, sovereign wealth fund tracker Global SWF said.

Luxury electric vehicle maker Lucid (LCID.O) contributed “just 16% of the increase despite representing 24% of the portfolio,” the fund tracker said on Tuesday.

“Lucid continued to drag down the fund’s US public holdings with q-o-q growth of 6.2% to US$9.47 billion – a level that was still 45.6% down on end-June 2022.”

The remainder of its holdings were up 10.7% from the previous quarter to $29.46 billion, beating the S&P 500 Index’s 8.3% rise over the same period, Global SWF said. The holdings ex-Lucid were 25.9% higher year-on-year.

PIF, which manages about $700 billion in assets, boosted its Lucid stake by 24% after it contributed nearly two-thirds of a $3 billion capital raise. There were otherwise minor changes to its portfolio.

The fund made a total comprehensive loss of 58.545 billion riyals ($15.61 billion) last year, according to a recent annual report. That was mainly “due to the unrealized losses (change in fair value) of investments in Softbank Vision Fund in addition to losses of other investment due to market downturn particularly in tech sector,” the annual report said.

PIF boosted the weight in the U.S. portfolio of its retail and consumer holdings, including gaming, by 39% and tech’s weight rose to 16%. Retail and gaming was up 15% and tech 18% in terms of value, Global SWF said.

PIF has overall invested $5.4 billion in Lucid, the carmaker said in a second-quarter presentation. Lucid is building its first overseas factory in Saudi Arabia and electric vehicles are part of a vast economic agenda known as Vision 2030 to wean the economy off oil.

“The EV manufacturer has struggled with mounting losses and tightening cash reserves due to recession risks and a price war with its bigger rival Tesla, which has undermined PIF’s otherwise successful US equities holdings,” Global SWF said.

“By bringing Lucid back into its full ownership, PIF could better align the carmaker with its vision.”

($1 = 3.7505 riyals)

Reporting by Yousef Saba; Editing by Conor Humphries

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