PIF will act as a strategic anchor investor for new private credit and public equity strategies in Saudi Arabia and the wider GCC region
Saudi Arabia’s Public Investment Fund (PIF) and Goldman Sachs Asset Management recently announced the signing of a non-binding memorandum of understanding (MoU) for PIF to act as a strategic anchor investor for new private credit and public equity strategies in Saudi Arabia and the wider GCC region.
An anchor investor is an institutional investor that enters the game right before an IPO and they are seen as a booster for companies looking for a successful listing.
“PIF’s collaboration with Goldman Sachs Asset Management demonstrates our continued efforts to build new partnerships with a diverse range of leading international financial institutions, enhancing local markets. This MoU is another element in PIF’s strategy of attracting global capital and expertise from a wide range of investors to the region while facilitating knowledge transfer and capacity-building within Saudi Arabia,” stated Yazeed A. Al-Humied, deputy governor and head of MENA investments at PIF.
Strengthening domestic asset management industry
The new investment funds seek to raise equity capital from international investors, with significant capital allocated for investments in Saudi Arabia. The agreement also strengthens the domestic asset management industry and encourages regional and international managers to expand their presence in Saudi Arabia. Asset management is part of PIF’s wider efforts to diversify the Saudi economy and enhance local capital markets.
Under the agreement, the private credit strategy will target directly originated senior and junior loans and debt to companies that are domiciled in the GCC region or do most of their business with it. Meanwhile, the public equity strategies will focus on investments in publicly-listed equity securities of companies that are either listed on the Saudi exchange or have businesses connected to Saudi Arabia.
“We are proud to partner with PIF to develop these investment strategies, which we believe can offer strong risk-adjusted returns to our clients. Drawing on our decades of experience investing in public and private markets, our aim is to help clients access the dynamic opportunities created by Saudi Arabia and the wider GCC’s rapid economic transformation,” stated Marc Nachmann, global head of asset and wealth management at Goldman Sachs.
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Goldman Sachs expands local footprint
The partnership will also facilitate knowledge-sharing to spur growth in the Saudi asset management sector. By leveraging PIF’s institutional strength and Goldman Sachs Asset Management’s experience investing across public and private markets, it will also contribute toward PIF’s goal of positioning Saudi Arabia as a hub for global investment.
Goldman Sachs has been growing its presence in Saudi Arabia in recent years, recently announcing the opening of a new office in Riyadh. The company will explore expanding its local footprint as part of the partnership.
