Saudi Arabia’s Public Investment Fund is set to become an anchor investor in a series of new funds from Goldman Sachs Asset Management focused on the kingdom as well as all six states of the Gulf Cooperation Council, according to a statement seen by Bloomberg News.
The pair signed a memorandum of understanding — so far nonbinding and still subject to regulatory approval — related to the funds, which will be centered on private credit and public equity strategies in the GCC region. On top of the PIF’s commitment, GSAM will also be raising money from international investors for the initiatives, the statement says.
With private credit, GSAM will target lending opportunities with companies that are either based in the Gulf region or generate most of their business from there. On the public equity side, the firm will look to invest in companies that are either listed on the Saudi exchange or have businesses connected to the country.
Goldman Sachs is among Wall Street firms that have been expanding their presence in Saudi Arabia as the kingdom looks to increasingly use its investments as a way to develop the local economy and promote itself as a financial hub. The PIF has $925 billion under management.
Firms including Brookfield Asset Management, BlackRock and State Street have launched investment vehicles backed by the Saudi wealth fund that are designed to attract more foreign capital into the kingdom, with BlackRock’s effort announced at $5 billion and Brookfield’s at $2 billion.
Goldman Sachs last year became the first Wall Street bank bank to be granted a license from the kingdom to establish its regional base in Riyadh. The government has indicated it will stop working with international financial firms whose regional headquarters aren’t in the country.
