The Clap
BlackRock, the world’s largest asset management company, intends to launch an “investment platform” in Saudi Arabia.
This platform will be backed by up to five billion dollars from the Saudi sovereign wealth fund.
Memorandum of Understanding
BlackRock Saudi Arabia, the local company affiliated with the global asset management institution BlackRock, signed a memorandum of understanding with the Public Investment Fund.
The purpose is to establish an “integrated multi-asset investment platform” in Riyadh, focusing on an initial investment from the fund.
This is contingent upon achieving a set of objectives determined by both parties.
So What
It is expected that the services of the new platform, named “BlackRock Riyadh Investment Management Platform” (BRIM), will include a range of investment strategies across various public and private asset classes.
These will be managed by BlackRock Saudi Arabia, with support from the asset management team of the global BlackRock platform.
The platform aims to accelerate the growth of capital markets in the Kingdom.
Additional funds, both domestic and foreign, are also planned to be raised.
Some Context
The Public Investment Fund is a key cornerstone in the plans of Crown Prince Mohammed bin Salman for national economic diversification.
This involves establishing new sectors and investing in massive infrastructure development projects.
Since 2017, the PIF has established 94 companies.
It has also contributed to the creation of over 644,000 direct and indirect local jobs, according to the fund.
This reflects its transformation in recent years from a passive sovereign investor to a global investment tool, spending billions of dollars on everything from technology to sports.
The fund, with assets totaling $925 billion, invested $31.5 billion during the previous year.
This made it the “world’s highest-spending” sovereign wealth fund.
Now What
A spokesperson for BlackRock stated that their platform will focus on Saudi Arabia but will include investments in different regions across the Middle East and North Africa.
This will encompass investments in infrastructure, credit in private markets, and equities in public markets.
Larry Fink, Chairman and CEO of the giant company, also noted that the Kingdom has become an increasingly attractive destination for global investments.
Finally, Yazeed Alhumied, Deputy Governor of the Public Investment Fund, stated that the agreement will help make the Saudi investment market “more diverse and vibrant” on the international stage.
