Saudi Arabia's Public Investment Fund (PIF) and Goldman Sachs Asset Management announced on Monday 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.
The new investment funds will aim to raise equity capital from international investors, with significant capital allocated for investments in Saudi Arabia.
The MoU would further strengthen the domestic asset management industry and encourage 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.
Deputy Governor and Head of MENA Investments at PIF Yazeed A. Al-Humied said: “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.”
“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,” he stressed.
Global Head of Asset and Wealth Management at Goldman Sachs Marc Nachmann said: “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. We are excited to see this partnership expand and to continue building our presence in Saudi Arabia,” he added.
Under the MoU, 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. 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.
The partnership will facilitate knowledge-sharing to spur growth of 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 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 over recent years, having recently announced the opening of a new office in Riyadh. The company will explore expanding its local footprint as part of the partnership.
Monday's non-binding MoU remains subject to the satisfaction of certain required conditions including obtaining all necessary regulatory and internal approvals, among other milestones.
