Abraaj Capital to establish SAR 2 Billion Saudi investment platform

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  • Announcement made by Abraaj Capital and SAGIA on sidelines of Global Competitiveness Forum in Riyadh
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Abraaj Capital, the region’s leading private equity firm, and the Saudi Arabian General Investment Authority (SAGIA), which serves as the gateway to investment in Saudi Arabia, jointly announced today Abraaj Capital’s plans to initiate a SAR 2 Billion investment platform dedicated exclusively to investing in the Kingdom of Saudi Arabia. This landmark initiative will be focused on making investments across a variety of asset classes including private equity, small-and-medium sized enterprises (SMEs), real estate, and public equities.

This will be a pioneering initiative in the region that will seek to access attractive investment opportunities in the Kingdom’s private and public sectors. Despite the global financial crisis, the fundamental macroeconomic environment in Saudi Arabia continues to remain robust underpinned by favorable demographic trends, reform-oriented policies, and prudent use of hydrocarbon liquidity to ensure long-term sustainable economic growth.

With the ability of this investment entity to potentially tap the public markets at some point in the future, this initiative will lay the seeds for the potential establishment of one of the region’s first permanent capital vehicles, a form of investment entities that is increasingly being used in developed markets by private equity firms. The plan to initiate the SAR 2 billion investment platform is subject to obtaining all necessary regulatory clearances and approvals from all relevant regulators including the Capital Markets Authority (CMA).

This announcement was made today by Amr bin Abdullah al-Dabbagh, the Governor of SAGIA, and Arif Naqvi, the Founder and Group CEO of Abraaj Capital, on the sidelines of the 5th Annual Global Competitiveness Forum (GCF), which is convened by SAGIA.

“We are extremely pleased to announce our intention to launch this investment platform that will capitalize on the favorable macroeconomic landscape and the solid investment opportunities that the Kingdom has to offer. One of the areas this initiative will be active in is to facilitate the growth of small and medium enterprises here in Saudi Arabia,” Naqvi said. “As this announcement makes clear, we are fully committed to supporting the promotion of a culture of entrepreneurship in the Kingdom, and shouldering our share of the private sector’s responsibility to help create jobs in our region.”

“Today, the greatest challenge facing the Kingdom, and the wider region, is the imperative of job creation,” added Naqvi. “Approximately 70 per cent of the population of Saudi Arabia is under 30 years of age. The launch of our Saudi-focused investment platform is a compelling private-sector initiative that, we believe, will help address this demographic imbalance by facilitating expansion opportunities for Saudi-based companies of all sizes thanks to our financial resources and strategic/operational capabilities across the MENASA region and beyond. This in turn will have direct and positive consequences on the social and economic environment in the Kingdom.”

“Saudi Arabia is by far one of the largest economies in the region, and offers a wide spectrum of investment opportunities in sectors such as healthcare, infrastructure, education, transportation & logistics, food & beverages, and more. Additionally, the Kingdom’s real estate and public equities markets offer a compelling value-proposition for investors. It’s a market that has great potential.” he added.

With an investment strategy predicated on “active involvement” in its partner companies, Abraaj not only provides capital and financial expertise to businesses, but also facilitates their growth through its operating/industry knowhow and its network across the MENASA region. Abraaj has over 100 investment professionals in 8 offices across MENASA, including a dedicated team of experienced senior industry executives and advisers who concentrate on operational issues at partner companies.

With the resurgence of economic growth in emerging markets including MENASA, the pace of general investment activity is expected to rebound. With a diversified presence across the various asset classes in the alternative asset management space (spanning private equity, public equities, SMEs and real estate), Abraaj Capital is well positioned to assist in the long term value creation impact on the Kingdom’s business environment.

In line with its focus on supporting private sector companies in Saudi Arabia, Abraaj Capital is serving as strategic sponsor of the Saudi Fast Growth Initiative, one of the key activities at this year’s GCF. Abraaj’s Capital’s sponsorship of GCF Saudi Fast Growth Initiative follows a series of recent activities by the firm to support businesses in the region’s– including launching of Riyada Enterprise Development (RED) a US$ 500m initiative focused on investing in the MENA SME space; hosting the Celebration of Entrepreneurship, a unique two-day gathering that focused on inspiring, empowering and connecting 2400 entrepreneurs from the region; and introducing Wamda.com, MENA’s most comprehensive online content and community portal dedicated to entrepreneurship and innovation. In addition to providing much needed growth capital to SMEs in the Kingdom as a result of today’s announcement, Abraaj has also agreed with SAGIA to develop initiatives that will seek to promote a holistic ecosystem to encourage entrepreneurship within the Kingdom by providing entrepreneurs with access to knowledge workshops, mentorship initiatives and networking platforms.


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