The Kingdom’s sovereign wealth fund PIF and Canada’s Brookfield Asset Management Ltd. are looking to expand investment opportunities in the region, given that each side manages assets of around USD one trillion.
Details
PIF inked a non-binding MoU under which KSA’s fund will become a “strategic anchor investor” for Brookfield Middle East Partners (BMEP), a new platform, that aims to serve as Brookfield’s new private equity vehicle for investments in businesses based in Saudi Arabia and the wider region.
The agreement was penned at the 8th Edition of the Future Investment Initiative in Riyadh.
So what
BMEP intends to target acquisitions, structural solutions, and investment opportunities across a range of strategic sectors.
These include the industrials, business and consumer services, technology, and healthcare sectors.
At least 50% of the venture capital will be allocated to local investments and leading international companies looking to expand their operations in the Saudi market.
This will contribute to enhancing foreign direct investment flows into the country.
The partnership aims to leverage the strengths of PIF and Brookfield to advance local private equity investment opportunities and strengthen economic development in Saudi Arabia.
It is also in line with KSA’s plan to position itself as a leading hub for global investment and economic growth.
Additionally, it provides the global investment firm with the extra financial strength to pursue deals in the oil-rich Gulf region.
Some context
Brookfield is one of the largest foreign direct investors in Gulf Cooperation Council countries.
It has been operating in the region since 1997 and has been investing directly since 2015.
The firm, one of the world’s largest alternative investment management firms, has built a portfolio of over USD 12 billion of managed assets across private equity, real estate, and infrastructure.
Now what
The Kingdom’s sovereign wealth fund is leading massive infrastructure projects, including the construction of entirely new urban and industrial areas like NEOM.
It is currently planning to reduce its international investments by about a third in a bid to gear its efforts toward advancing local projects.
