Saudi wealth fund PIF to anchor Brookfield’s $2bn Middle East fund

Saudi Arabia’s Public Investment Fund (PIF) said on Wednesday that it signed an MoU with Brookfield Asset Management, under which the $925bn fund will serve as a strategic anchor investor for the asset manager’s newly launched private equity vehicle for the region, Brookfield Middle East Partners.

The newly founded investment platform will target buyouts, structured solutions, and other investment opportunities across a range of strategic sectors, including industrial, business, consumer services, technology, and healthcare.

PIF and Brookfield said in a joint statement that at least half of the fund will be allocated to deals within the kingdom and to international firms looking to expand locally — a move aimed at attracting foreign direct investment.

The deal, signed at the Future Investment Initiative (FII) forum in Riyadh, seeks to leverage the relative strengths of PIF and Brookfield to enhance local private equity investment opportunities further and foster economic development in the kingdom.

“PIF’s collaboration with Brookfield demonstrates our continued efforts to foster international partnerships that enhance local markets,” said Yazeed A. Al-Humied, deputy governor and head of MENA Investments at PIF.

“This MoU represents a step toward achieving PIF’s vision of attracting global capital and expertise to the region while facilitating knowledge transfer and capacity-building within Saudi Arabia.”

Brookfield, which manages approximately $1tn in assets across more than 30 countries in five continents, will expand its Riyadh office as part of the deal and make its Brookfield Academy available in Saudi Arabia to facilitate knowledge-sharing and talent development.

Meanwhile, the partnership marks the latest example of foreign firms that are raising Middle East-focused funds. Goldman Sachs is reportedly working on one, while the PIF committed $5bn to BlackRock for local investments.

The new entity, known as BlackRock Riyadh Investment Management, will receive additional cash injection from local and international investors.

The Riyadh-based investment platform will invest across a range of asset classes. It is expected to accelerate the growth of capital markets in Saudi Arabia by supporting foreign institutional investment in the Gulf state.

PIF, the primary vehicle for Prime Minister and Crown Prince Mohammed bin Salman’s plans to steer the Saudi economy away from oil, is cutting its overseas investments by about a third, its governor said at the FII as Saudi Arabia taps into its resources to fund Vision 2030.

Read: BlackRock to launch PIF-backed Saudi investment platform